Sunday, August 10, 2008

Report: Sovereign Fund To Be Major Buyer of Foreclosed U.S. Homes

NyPo reports:

One sovereign fund, said to have earmarked $29 billion to purchase foreclosed residential real estate, recently hired a West Coast mortgage broker and is starting to search for bargains...

The search is concentrating on single- and multi-family REO (real estate owned) homes, or homes that have already been taken over by the mortgagee...

A sovereign fund would have two distinct advantages over other investors - the depressed value of the US dollar makes the homes a bargain, and sovereign funds have deeper pockets.

The sovereign fund of Abu Dhabi, for example, has a reported $875 billion in assets, while Norway has $391 billion, Singapore has $303 billion and Kuwait has $264 billion in their sovereign funds...

At $200,000 per house, $29 billion buys 145,000 homes. The current inventory of homes for sale is just over 4 million.

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