The typical price Fannie Mae received for foreclosed homes sold in the first quarter fell to 74 percent of the unpaid mortgage principal from 93 percent in 2005, according to Harrison. 'You wouldn't want that home to bring down your property value.' 'We want to treat that home as if it was your own, or as if you were living next door to it,' Harrison said. Getting the highest price helps preserve neighborhood property values, she said. REO stands for 'real estate-owned,' a designation for properties that have been repossessed by creditors. 'Where there are pockets of distressed real estate, it does have an adverse effect on the surrounding properties.'įannie Mae's goal in selling its properties is to get the highest possible price, even if it means hanging on to them longer, said Gabrielle Harrison, the company's vice president for REO sales. 'It's a no-win for the housing market,' said Ron Peltier, chief executive officer of Berkshire Hathaway Inc.'s HomeServices of America Inc., the second-largest U.S. The amount the company sold was $952 million, compared with $706 million a year earlier. The value of Fannie Mae's foreclosed property doubled in the first quarter to $4.72 billion from $2.4 billion a year earlier, and the number of homes it owned climbed 64 percent to 43,167, according to a regulatory filing. That's 25 percent lower than its $13.41 New York Stock Exchange composite price yesterday. Orenbuch, whose Fannie Mae recommendations would have yielded a 65 percent return to investors who followed them over the last year, the highest of any stock analyst tracked by Bloomberg, said the Washington-based company will sink to $10 share. 'With prices decreasing, it's better to get rid of houses quickly.'

'Progress on this is probably one of, if not the single most important economic process right now,' Orenbuch said. At that rate, the two mortgage companies stand to lose $1.39 billion on the foreclosed houses they currently own. Foreclosed houses sell at an average discount of about 20 percent, according to economists Ethan Harris and Michelle Meyer at New York-based Lehman Brothers Holdings Inc. mortgage finance companies, owned a record $6.9 billion of foreclosed homes on March 31, compared with $8.56 billion held by all 8,500 U.S. Together, Fannie Mae and Freddie Mac, the two biggest U.S. Late payments on the company's home loans, a harbinger of foreclosures, almost doubled in the past year. Unsold properties may weigh on the company's stock, which lost almost half its value since June 5, said Moshe Orenbuch, managing director of equity research at Credit Suisse Group AG in New York. The home sold in 2005 for $110,000.įannie Mae acquired twice as many homes through foreclosure in the first quarter as it sold, regulatory filings show. So broker Raymond Megie, who is handling the foreclosure sale, advised cutting the price to $5,000.

mortgage finance company, couldn't find a buyer who would pay $6,900 for the three-bedroom house at 1916 Prospect St. (Mannie Garcia/Bloomberg News)įannie Mae, the largest U.S. Signage for Fannie Mae stands outside company headquarters in Washington, July 16, 2008. dollars or in terms of financial arrangements comparable thereto and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale.Fannie Mae Unsold $5 Billion Homes Bring Peril to Shareholders Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated (2) both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest (3) a reasonable time is allowed for exposure in the open market (4) payment is made in terms of cash in U. Here is the market value definition: DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. The market value definition is pre-written in FNMA’s appraisal forms. 2010 by Carlton Mitchell Certified Residential Appraiser in Maryland and Virginia. Fannie Mae’s market value definition and what it means to an appraiser

Fannie mae foreclosures market value