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Fannie Completes Second Bulk REO Auction of 2010

Fannie Mae recently completed a bulk auction of 212 real estate-owned properties, its second such offering of the year.

The GSE, whose stated goal is to sell REOs to owner-occupants, would not comment on the auction but GSE sources and bidders confirmed it.

Investors familiar with the matter noted that the properties were in multiple states and represented some of Fannie's most dilapidated holdings. "You might say this was the bottom of the barrel," said one West Coast-based investor. "One had a cracked foundation, stuff like that."

Investors were offered an opportunity to buy the entire package or bid on eight "subpools." The properties include homes or plots in Arizona, California, Colorado, Idaho and Utah.

In January Fannie sold roughly 260 REO homes to 10 different investors.

At the end of December Fannie had an REO inventory of 86,155, compared to 63,538 at yearend 2008.

In other auction news, several smaller nonperforming and subperforming loan packages are on the market but are relatively small in size. Fortress Investment Group, New York, recently had a handful of packages totaling roughly $100 million out for bid, but it's unclear if the loans ever traded. The company could not be reached for comment.

Before May 1, Fannie Mae is offering a 3.5% discount for buyers of REO homes.

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