Q: We are homebuyers who have lost out to cash paying investors. The winning buyers turned the houses into rentals. It’s more than frustrating.
We have relatives who had purchased foreclosures. You wrote that after the 2007-2008 real estate crisis, investors recovered hundreds of thousands of foreclosures in California. If so, what’s the point of waiting for foreclosures if we’re competing with retail or institutional investors who want another rental property?
A: The foreclosures we will see nationwide most likely have a loan generated before or during the 2008 financial crisis. Other circumstances could bring a residential property into the foreclosure process. Foreclosures have been and will continue to be a small percentage of housing inventory due to several factors including, but not limited to: better lending practices due to the Dodd-Frank Act of 2010, lower interest rates, rising property values. properties, personal savings increased dramatically and a historically low unemployment environment.
The great news is that Assembly Bill 2170 (Residential real property: foreclosure sales act) was approved by the Governor of California on September 30, 2022. It gives homeowners a “first look.” There are 58 counties in California. I don’t know where you want to buy, but thanks to AB 2170, there could be a foreclosure purchase for a homeowner like you.
Fortunately, this law mimics the federal First Look program. The Federal Housing Finance Agency press release dated September 1, 2021 states in part: “First Look Program, the Federal Housing Finance Agency (FHFA) has extended from 20 to 30 days the period during which homeowners, public entities and nonprofits will have the exclusive ability to purchase real estate (REO) properties from Fannie Mae and Freddie Mac (the Companies) before they are available for purchase by investors.
Assembly Bill 2170 states: “This bill would prescribe requirements that would apply to sales of real property containing one to 4 residential dwelling units, inclusive, that are acquired by foreclosure under a mortgage or deed of trust by an institution or which are acquired at a foreclosure sale by an institution, as defined. The bill would require that the institution, during the first 30 days of listing a property, as specified, only accept bids from eligible bidders, as defined, and respond, in writing, to any bids received from eligible bidders before considering any other bids.”
Eligible bidders are defined as follows: “2924p. (a)(2) Promote owner occupancy by enacting legislation consistent with the provisions of the federal First Look program that provides homeowners and affordable housing providers the opportunity to have their offers considered on foreclosed properties before other offers.
This isn’t the first legislative victory for struggling homebuyers and affordable housing advocates. You can be sure it won’t be the last.
Questions, concerns or requests? Realtor Pat Kapowich is a licensed real estate brokerage manager and career-long consumer protection advocate. His hometown of Sunnyvale, California is where he is based. Office Landline: 408-245-7700, [email protected] Broker # 00979413 www.SiliconValleyBroker.com
California Daily Newspapers