Fannie Mae / Freddie Mac buying home from Orange County Auction... what's the purpose? (Orlando: foreclosures)

[WithDisp]

Fannie Mae / Freddie Mac are buying home from Orange County Auction... what's the purpose?

Curious as to what this practice is all about?

I know they buy homes and then either fix and resell, or just resell offering mortgages where people previously would have had to buy cash- but what is their for them to gain by doing so? Buying homes for 100K and reselling for 110K hardly seems worth it.

If bidding against them are they willing to ultimately spend an ungodly amount of money to purchase a property, just for the sake of turning over homes in a community?

Just very bizzare to me bidding against a government agency that's combined over 500 Billion dollars in debt. Obviously I'm not going to win unless I'm the US Treasury.

[HomesickFloridian]

Not likely they'll be buying houses for inflated prices.. Actually, like buying a car in an auction, you should have an edge as they have a ceiling that you don't if you intend to purchase for personal use..

[qdogfball]

Most likely they have a titled interest in the property.

Does Foreclosure Clear the Title to a Property? | Home Guides | SF Gate

[BPevehouse]

just a guess, as I am positive there is more to the story but from what I gather, qDog is likely correct.
Fannie & Freddie are likely the lien holders, and will bid up to an amount that they feel would satisfy them.

So if these to GSE's have a property that has a mortgage for $300k, and it goes to foreclosure auction, it would appear appropriate that they would bid on the property up to FMV (fair market value) or possibly 75%-80% of FMV

I have seen HOA's start foreclosure proceedings for unpaid HOA dues, and they will bid up to near their unpaid assessment balance. This is to allow them to recoup their losses. BUT.... this type of foreclosure is only satisfying the HOA, and recently one local buyer thought he had picked up a $250,000 property in East Orlando for $17k, only to find out he bailed out the HOA, but still had to deal with the mortgage company and soon their foreclosure proceedings. Essentially that buyer lost $17k + any dues that were owed from the time he took possession until the bank foreclosed.

Auctions are a viable source to search for a property if you are familiar with the area and have a good knowledge of what information is available about multiple parcels.

[WithDisp]

Originally Posted by BPevehouse

I have seen HOA's start foreclosure proceedings for unpaid HOA dues, and they will bid up to near their unpaid assessment balance. This is to allow them to recoup their losses. BUT.... this type of foreclosure is only satisfying the HOA, and recently one local buyer thought he had picked up a $250,000 property in East Orlando for $17k, only to find out he bailed out the HOA, but still had to deal with the mortgage company and soon their foreclosure proceedings. Essentially that buyer lost $17k + any dues that were owed from the time he took possession until the bank foreclosed.

Auctions are a viable source to search for a property if you are familiar with the area and have a good knowledge of what information is available about multiple parcels.

Yeah I've seen the HOA leins go on auction at time- I hear that there is a market for people to buy them since they can often delay foreclosure for X amount of time, and either live or collect rent in that time. Strange gamble but I imagine there's some logic to it -at times-.

correct me if I'm wrong but those HOA liens are considered 'junior' leins, and lose their worth when the property is transfered from the bank to a new buyer/individual.... i.e. the HOA kinda gets screwed.

[qdogfball]

Yes, the HOA liens lose when others higher in Lein chain forclose. "Transfer" of property does not necessarily drop the leins.

Most people should NOT attempt to buy out the HOA lein and then rent.

[newbieheretoflorida]

Always do a title search prior to bidding on any foreclosures to see how many liens are against the property.