Fannie Mae’s First Look initiative, a program that is designed to bypass non-owner occupants (read: investors) to bring owner-occupants and public entities together with REO properties, has undergone a tuneup to make it more effective. Julia Dugger, Fannie Mae’s senior manager of marketing communications, says that while the program has been successful, execution has been tricky largely because generally MLS listings, where the First Look REO properties have been advertised, are not available for viewing for the parties that the program is targeting.
To address this, First Look properties will now be listed on HomePath.com rather than MLS and will be identified by the First Look logo, which indicates that the home is in the “first look” marketing period, which lasts 15 days.
The First Look program is designed to put owner-occupants in homes instead of making those properties available to investors for purchase. For the first 15 days of Fannie Mae REO listings, only offers from owner-occupants and public entities are considered. If the house sells in that time period, then it will go to one of these types of parties rather than to an investor. Fannie Mae says that these buyers are preferable because they bring “permanency and stability to tenuous markets where swollen inventories of foreclosures have taken their toll.” However, as usual, I think that everyone might be better served by letting the market work. After all, if an investor can make a higher offer and meet financing terms, then Fannie Mae would recoup more of its losses and still have a new owner who has a vested interest in keeping that property inhabited and intact.
I’d like to hear about your experiences, if any, with the First Look program. Have you found it to be a help, a hindrance, or a non-issue? Thank you for reading the Bryan Ellis Real Estate Letter – your comments and questions are welcomed and encouraged!