Real estate: Buyers who will live in homes get first chance at foreclosures - Arizona Daily Star

Two major lenders, Fannie Mae and Freddie Mac, want to keepinvestors at bay when they list foreclosed Homes for Sale. Their "First Look" programs give temporary preference to buyerswho will occupy a home as their primary residence. Those buyers, aswell as some nonprofit groups and public entities, are given 15days to submit offers to purchase properties before investors jumpin the mix. The idea is to stabilize neighborhoods and cut into housingvacancies by selling homes directly to those who will live inthem. Before First Look, investors would make low-ball offers onforeclosed homes, shutting owner-occupants out of the competition,said Jay Ryan, vice president of foreclosure sales at FannieMae. It's also worth pointing out that Fannie Mae and Freddie Macwere taken over by the federal government in the wake of thehousing crash. As such, it appears the feds consider it anobligation to ensure that investors aren't the only ones cashing inon the glut of foreclosures. Another 7,800 have gone to public entities, which purchase theproperties through the U. They then spruceup the vacant houses and resell them. The program can frustrate investors, but only when propertiesare priced aggressively enough to attract their interest, saidJustin Bentley a Real Estate professional with Tierra Antigua. Often, when properties are listed on Fannie Mae's foreclosurelisting website, they're priced too high for investors, saidBentley, who himself invests in bank-owned properties. Without a grace period, Bentley agreed that investors can pushany potential owner-occupants out of the bidding competition. Everyone, for the most part, agrees that investors contribute tothe housing market's recovery. They purchase and fix up propertiesthat banks otherwise wouldn't. Fannie Mae agrees with that, which explains why the First Lookperiod only lasts about two weeks. The time period givesowner-occupants and public entities enough time to check outproperties, but it's short enough to ensure the homes aren'tlanguishing on the market, Ryan said. When investors purchase properties, they generally hold on tothem, leaving them vacant or renting them out, because they'rewaiting for prices to rise before selling them, said While investors have their place in the market's recovery, theydo drive down housing prices. This material may not be published, broadcast, rewritten or redistributed. Homes for Sale