Not many details of the proposed action by the government-backed agency regarding unloading of the 122,616 foreclosed homes in its inventory are available. However, the test bulk purchases will first take place in Southern California, Arizona and Florida, which were worst hit by the foreclosure crisis. New York-based GTIS Partners and Menlo Park, California-based GI Partners are planning to invest $1 billion each for purchasing the foreclosed homes. Joining them will be other Wall Street firms, including Wells Fargo (NYSE: WFC), Deutsche Bank and Barclays Bank.  

 

The first step in the foreclosure initiative was taken by the Federal Housing Finance Agency (FHFA) last week as part of the government’s takeover of the Freddie Mac and Fannie Mae agencies. It is expected that the foreclosed homes will be sold at a throwaway price to the private equity firms. Aspiring investors will have to get pre-qualified in order to establish eligibility standards for bidding.