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Atlanta Cheap Homes Sold by FDIC to Investors

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By : John Cutts    99 or more times read
A record number of Atlanta cheap homes were sold by the Federal Deposit Insurance Corporation to investors last year as it closed nearly 40 banks in metro Atlanta and other parts of Georgia last year. Throughout the state, nearly 1,400 bank owned homes were sold by the FDIC.

Over 400 of these homes were real estate owned foreclosures from Omni National Bank, which collapsed largely because its top officers, including co-founder Jeffrey Levine, engaged in mortgage fraud. Omni officers financed the same properties many times over in flipping schemes that artificially inflated home values.

All the Omni homes were sold to real estate firms operating in Atlanta and in Denver, with 176 of the units sold for only $3 million, which meant that each unit was sold for an extremely low price of $17,247.

Nonprofits and neighborhood associations are now criticizing the FDIC for selling all these Omni homes to corporate investors. They said that it is now difficult for them to carry out redevelopment programs using funds from the Neighborhood Stabilization Program because the corporate investors were not selling and were difficult to negotiate with.

What is frustrating, according to housing nonprofits in Atlanta, is that these corporate investors, which are hard to contact, are not maintaining the properties. The local organizations contended that with the NSP funding that they now have, they could buy a large number of Atlanta cheap homes.

As a response to the criticisms, FDIC officers explained that they offered the Omni homes through public foreclosure auctions in Atlanta, but they insisted that before they held the auctions, they first notified local housing organizations, the Habitat for Humanity, the Atlanta Housing Authority and NSP participants.

The FDIC people said they needed to sell the properties quickly to cut costs, maximize returns and reduce risks associated with holding foreclosed properties. FDIC spokesperson said that 3 bidders out of the 34 joined the auctions purchased the Omni homes.

Of the 1,391 Georgia homes sold by the FDIC last year for nearly $202 million, a huge majority were located in metro Atlanta. The statewide total accounted for 25 percent of all homes sold by the FDIC nationwide in 2009.

According to the Atlanta Neighborhood Development Partnership, the 271 Omni homes purchased by real estate firm Carter are expected to be fixed and managed properly. It doubts, however, the commitment of other entities that purchased Atlanta cheap homes. These entities could just be waiting for prices to rise and would not do anything to improve the properties.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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