Pacifica Companies is the first winning bidder in Federal Housing Finance Agency’s REO pilot initiative, purchasing 699 Fannie Mae properties in Florida.
FHFA will announce the winning investors for properties in other areas upon closing of the transactions in the coming weeks.
All properties were sold near or above market value. However, the 541 properties in Atlanta were not awarded. Reports in July revealed the success of the pilot program, but also the agency’s difficulty in selling the properties in Atlanta, first reported by HousingWire in July, which will be evaluated for disposition through Fannie Mae’s retail sales operation or through future structured transactions.
The Atlanta housing market is suffering from weakening home price and rampant foreclosures, while similar markets began to show signs of stabilizing, if not rising, toward a full recovery. For the first time since 2006, Georgia holds the highest foreclosure rate in the country.
When he was asked a question from an Atlanta real estate broker at HousingWire’s REO Expo in June, Mark Fleming, chief economist at CoreLogic (CLGX) paused and said, "We need to talk after the presentation. Atlanta is a curious case. We need to figure out what's going on"
The pilot program's winning bids came from investors more comfortable with tight cash flow margins. Investors who modeled their bids to bank on home price increases either pulled out of the process or were outbid.
"We are pleased with the response from the market and look forward to closing transactions in the near future,” Edward DeMarco, acting director of FHFA, said in July.