A letter to Congressman Gary Miller expressing support for his bill HR 5823 to eliminate the FHFA Bulk Sale Pilot Program in California.

1. September 5, 2012
The Honorable Gary Miller
2349 Rayburn House Office Building
Washington, D.C. 20515
Dear Congressman Miller,
As a resident living and working in Southwest Riverside County, I am pleased to SUPPORT your bill H.R. 5823, the
Saving Taxpayers from Unnecessary GSE Bulk Sales Program Act of 2012.
We have just lived through the deepest and most prolonged housing slump in history. Our region suffered one of the
highest rates of foreclosure in the country for the past three years. But we are starting to climb out of that slump and our
housing market is robust with strong demand, multiple offers above asking price and shrinking inventory. In just the past
year we have gone from 60% of homes on the market being distressed properties to just over 30%.
We have very serious concerns with the design of the Federal Housing Finance Agency's (FHFA) “REO Initiative” pilot
program. We believe implementing this program as proposed would negatively impact the housing market in California
and is counter to FHFA's role as conservator to restore the financial health of the Government Sponsored Enterprises
(GSEs) and protect the taxpayer. Given the current state of California's housing market, we can find no reason to include
California in this pilot program. Our market is getting healthy on its own again, we can't afford any more government
intervention.
According to our local Realtor® Association, local inventory of homes has dropped 62% just since January of this year
and prices have been stable to slightly appreciating since January 2009. Local cities including Temecula, Murrieta, Lake
Elsinore, Menifee, Wildomar and Canyon Lake currently have salable housing inventories of 2 months or less.
Converting carefully selected REO properties into rentals might help reduce excess inventory in appropriately targeted
areas, namely those with high inventory and low demand. However, counties in California do not reflect the market
conditions required for the GSEs to benefit from such a program. While Los Angeles and Riverside counties are included
in the pilot program, they currently have a shortage of homes available for sale. This environment of high demand and
low inventory is not appropriate for the REO pilot program. The GSEs have been able to minimize their losses on non-
performing loans in our counties through the traditional foreclosure disposition process. As such, we see no reason to alter
the current system in our county, as such an action would only harm the market and result in greater losses for the GSEs,
and ultimately the taxpayer.
More fundamentally, we are concerned that including California counties in this initiative is in direct conflict with FHFA's
duty as conservator to preserve and conserve the Company’s assets and property and to put the Company in a sound and
solvent condition. In California, there is no question that disposing properties through bulk sales will yield a lower return
for the GSEs and taxpayers than through traditional disposition methods. This means that such a program will increase
losses to the taxpayer and GSEs and make it more difficult for homebuyers to find their American Dream.
For these and other reasons, we are pleased to SUPPORT your H.R. 5823. Please let us know what we can do to assist
you in your efforts.
Sincerely,

2. Cc: (via fax)
The Honorable Gary Miller 202.226.6962
The Honorable Ken Calvert 202.225.2004
The Honorable Ken Calvert (District Office) 951.784.5255
The Honorable Joe Baca 202.225.8671
The Honorable Duncan Hunter 202.225.0235
The Honorable Timothy F. Geithner, Secretary Department of the Treasury 202.622.6415
Mr. Edward DeMarco, Acting Director, Federal Housing Finance Agency 202.649.1071
The Honorable Shaun Donovan, Secretary, Department of Housing and Urban Development 202.708.1455
Mr. Moe Veissi, President, National Association of Realtors 305.665.1230
From a recent report from the Southwest Riverside County Association of Realtors:
500
Southwest California
450 August Demand Chart 3 3 4
3 7 7 6
3
400 3 4 1 6 7
3
2 5 2
350 8
4 8
2
2 2 0
300 5
2 2 3
5 1
1 8 1 1 5
250
9 1 8
7 7 1
5 4
200 1 4 9 1 4
2 3
1 1
150 5 8 8
2
7 6 7 6 9 7 6
100 6 5 2
7 4 1 6 0 2
2 2 3 1 1 1 0 2 0
2
50 7 0 . . . . . .
5 2 0 8 5 6
0
On Market Pending Closed Days on Months Supply Absorption
(Supply) (Demand) Market rate *
Murrieta Temecula Lake Elsininore Menifee Canyon Lake Wildomar
* Absorption rate - # of new listings for the month/# of sold listings for the month