Along with the announcement that its “First Look” program has generated nearly 35,000 home sales since its inception last year, Fannie Mae VP for Alternative REO Dispositions Jay Ryan took a minute to encourage lenders and banks to make sure to keep investors in check: “While investors play an important role in the REO market, homebuyers who intend to occupy a home make an immediate and lasting commitment to the community and therefore merit priority consideration in the REO sales process,” he said. He added that public entities under the Neighborhood Stabilization Program (NSP) could also benefit from the opportunity to make offers “without pressure from open market competition”[1].
While on the surface this all seems very well-meaning if not necessarily a good thing for investors, real estate investors are being officially relegated to the second tier of home buyers. Many would argue that real estate investors have always been considered less desirable buyers than conventional buyers, but this blatant reining in of the market through First Look and NSP could have some serious, lasting consequences for everyone due to the precedent that these federal programs are setting.
Do you think that this regulatory bias against real estate investors is fair?
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[1] http://www.dsnews.com/articles/nearly-35000-fannie-owned-homes-purchased-through-first-look-initiative-2010-09-21
