By Mike Colpitts
An effort to block the bulk wholesale home sales of foreclosed property held by Freddie Mac and Fannie Mae to investors at cheaply discounted prices is being launched by an unlikely member of Congress, a Californian Republican.
Rep. Gary Miller, a 14-year GOP incumbent in a battle to retain his House seat in November’s upcoming election is launching the fight. Miller has requested that the financial services committee schedule time for the proposal to be heard in Congress as soon as possible.
However, the effort may have more to do about who supports Miller and is paying heavily for his re-election bid than anything else. The National Association of Realtors political action committee and a super PAC funded by the trade association have spent more than $709,000 on advertising and other campaign efforts to support his reelection.
The PAC is based in Chicago, where the NAR is also located. The Realtors association has plenty of money to spend on politics and makes huge contributions to candidates it supports. The organization spent $22 million just last year on lobbying efforts, according to the Center for Responsive Politics, a non-partisan group that tracks campaign contributions. NAR is also the single funder of the National Association of Realtors Congressional Fund, a Super PAC.
Stopping bulk wholesale home sales to investors at discount prices, which are already being tried in a pilot program with 2,400 homes with the Federal Housing Finance Agency (FHFA) would also halt Realtors from being involved in the sales, eliminating sales commissions.
During Federal Reserve chairman Ben Bernanke’s appearance before the House Financial Services Committee, Miller expressed doubts about the pilot program selling Fannie Mae owned foreclosures to investor groups in bulk.
“Seventy percent of the properties in the bulk sale were never individually marketed, which means that local homebuyers were not offered the low price Wall Street is getting for these homes,” a statement released from the Republican Congressman’s office said.
“Since these properties are owned by Fannie Mae, the lower sale price will come at a loss to taxpayers. Congressman Miller is outraged that the FHFA has moved forward with the bulk sale, and recently introduced legislation to prohibit the FHFA from completing the sale.”
Miller is no stranger to real estate industry backed issues. Last summer he introduced a bill in the House (H.R. 2413), to reform the nation’s housing finance system. The legislation would eliminate Fannie Mae and Freddie Mac, replacing them with the “Secondary Market Facility for Residential Mortgages,” which would issue and guarantee Mortgage Backed Securities (MBS).