| NEW YORK, April 12
NEW YORK, April 12 For the second time in five
months, Bank of America is tapping the red-hot market
for foreclosed homes by seeking bids on a bulk offering of
several hundred single-family homes.
Over the past several weeks, the nation's second-largest
bank by assets has solicited bids for a bulk deal that includes
up to 500 largely vacant single-family homes, some of which BofA
acquired after its merger with Countrywide Financial, according
to several sources within the real estate and mortgage sectors.
Countrywide was one of the largest subprime lenders in the
The bulk deal, which includes foreclosed homes in
California, Florida, Arizona, Texas, Pennsylvania and Georgia,
is one of the biggest block offerings of foreclosed homes ever
done by a bank, these sources say.
The bulk sale comes at a time that institutional investors,
including private equity firms and hedge funds, are raising
money to invest in a bulk offering of 2,500 renter-occupied
foreclosed properties being auctioned by Fannie Mae. The
government-sponsored mortgage finance firm is currently
accepting bids for that bulk sale under a trial project by the
Federal Housing Finance Agency, which regulates both Fannie Mae
and Freddie Mac.
The FHFA program is attracting interest from firms like
private firm TPG Capital, investment firm Oaktree Capital
Management, hedge fund Och-Ziff Capital, bond shop TCW and New
York City's Amherst Securities Group, as previously reported by
A Bank of America spokesman declined to comment on the bulk
Late last year, Bank of America went to market with a
smaller bulk offering o f a bout 200 foreclosed homes in
California and Florida. One source familiar with that deal said
the homes in that pool were acquired by several buyers.
One mortgage investor, who did not want to be identified,
said it appears that Bank of America is moving to hold regular
bulk sales of foreclosed homes as a way to reduce its inventory.
The investor, who has not bid on either bulk deal, said it is a
good time for the bank to s el l foreclosed homes, given the level
of interest shown by institutional investors righ t now.
Private equity firms and hedge funds are eyeing the
foreclosed market because the homes can be acquired at a
significant discount and then rented out for steady cash flow.
While the market for purchasing single-fa m ily homes remains
stagnant in the wake of the financial crisis, rental properties
are a hot commodity and even deemed a new asset class.
One advantage of a bulk offering by a bank is that investors
are not required to hold onto the homes for an extended period
In contrast, the FHFA, which is overseeing the Fannie Mae
offering, is requiring buyers to hold onto the properties for
several years to avoid having them flipped for a quick profit.
To date, the FHFA has prequalified several hundred
investment firms, property managers and other organizations to
bid for the Fannie bulk pool, say sources familiar with the
process. But it's still not clear how many bids the FHFA will
The deadline for submitting bids has been extended from
early April to mid-May. But sources say the deadline may not be
a firm one.