Obama to auction foreclosures in bulk to large investors

[Palmer Wilkins]

I'm not necessarily against Wall Street; however, it seems that the Obama Administration is interested in having large investment funds buy at auction and in bulk Fannie Mae, Freddie Mac and FHA foreclosures. You can read about it here:

http://www.cnbc.com/id/45063559/comid/4#comments_top

I'm interested in what others think about the potential plan and if others have information on it.

A plan like this may be unpalatable to larger funds buying properties in bulk considering the challenge of managing, renting and repairing the deferred maintenance of these properties.

Nonetheless, in my opinion, this potentially will decrease opportunities for smaller investors to invest in the foreclosure market.

[Jon Holdman]

Not much real info in that story. If there really is some administration plan to do a RTC type disposal, I'd like to see some direct info. This worked back in the 80's with the S&L crisis, so it should work now.

Don't assume some big funds would buy these tranches of properties and manage them. The RTC sold of some very big batches of houses as packages. They did a total of 17 transactions with book values ranging from about $100 million to $1 billion. The funds buying these houses disposed of them and I'm sure many eventually ended up in the hands of individuals.

This might result in more opportunities to individuals if the houses were to come onto the market more quickly than with the current processes.