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U.S. Weighs Renting Out Foreclosed Homes
Wall Street Journal ^ | August 9, 2011 | NICK TIMIRAOS

Posted on 08/09/2011 6:56:32 PM PDT by maggief

The Obama administration will announce plans Wednesday to seek investors' ideas for turning thousands of foreclosed properties owned by government-backed entities into rental homes, according to administration officials.

The move is intended to put a floor under declining home prices by creating a way to deal with hundreds of thousands of potential foreclosures in coming years.

Mortgage giants Fannie Mae and Freddie Mac sold a record 100,000 homes during the second quarter. Together with the Federal Housing Administration, the entities owned about 250,000 homes at the end of June, or around half of all unsold, repossessed properties. Another 830,000 homes backed by the entities are in some stage of foreclosure, according to Barclays Capital.

The Federal Housing Finance Agency, which regulates Fannie and Freddie, will issue the formal "request for information" with the administration to solicit proposals that shrink the glut of foreclosed properties weighing on the residential market.

(snip)

One proposal would sell packages of hundreds or thousands of foreclosed properties in bulk to investors that agree to rent them out. That approach is preferred by the Department of Housing and Urban Development, which is taking back properties as defaults mount on loans backed by the FHA.

Another approach would allowlet investors enter joint ventures with Fannie or Freddie to invest in a pool of converted rental homes. A national property-management business would handle the day-to-day landlord responsibilities. Investors would pay for rehabbing and maintaining properties and would share revenue from monthly rental income and the ultimate sale of the property. Such a joint venture would be modeled on the Resolution Trust Corp., which sold failed banks' assets in the early 1990s.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: fanniemae; fha; freddiemac; fubo; houseprojects; housing; marxist; obamanomics; pimp; projects; section8; thug
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1 posted on 08/09/2011 6:56:35 PM PDT by maggief
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To: maggief

How convenient that it worked out this way.


2 posted on 08/09/2011 6:57:46 PM PDT by LearsFool ("Thou shouldst not have been old, till thou hadst been wise.")
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To: maggief

Great...more Bammy stash. Is that where the maintenance and upkeep for these give-away houses will come from, too?


3 posted on 08/09/2011 6:58:06 PM PDT by Jane Long (2 Chron 7:14)
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To: maggief

...”joint venture with Fannie Mae and Freddie Mac” and that’s where any plan falls apart like a cheap suit.


4 posted on 08/09/2011 6:59:54 PM PDT by PMAS
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To: maggief

So which set of 0bama’s coneys will get first crack at these houses at rock bottom prices.


5 posted on 08/09/2011 7:00:10 PM PDT by YankeeReb
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To: maggief
Together with the Federal Housing Administration, the entities owned about 250,000 homes at the end of June, or around half of all unsold, repossessed properties

The gubmint owns houses? Doesn't sound constitutional to me.

6 posted on 08/09/2011 7:00:41 PM PDT by upchuck (Rerun: Think you know hardship? Wait till the dollar is no longer the world's reserve currency.)
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To: maggief

Great. The new single family Project, right next door.


7 posted on 08/09/2011 7:00:41 PM PDT by mkleesma (`Call to me, and I will answer you and tell you great and unsearchable things you do not know.')
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To: maggief

This is chilling.

Obama is a Pharoah who knew not Joseph.


8 posted on 08/09/2011 7:01:39 PM PDT by barstoolblues (Notes from the Hobbitt Hole. From Hezbollah Hobbitt)
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To: Jane Long

And if you vote for me I promise you a home in every garage!


9 posted on 08/09/2011 7:01:47 PM PDT by ArchAngel1983 (Arch Angel- on guard / Still Think You're Free?)
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To: maggief

It is at least more honest than telling us we own our homes and then charging property tax ie rent to keep them.


10 posted on 08/09/2011 7:02:06 PM PDT by DaveyB (Our Constitution was made only for a moral and religious people. -John Adams)
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To: mkleesma
The new single family Project, right next door.

100% correct!

11 posted on 08/09/2011 7:04:12 PM PDT by softwarecreator
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To: YankeeReb

I see two problems here. First, somehow you’d have to write this off via the banking sector as a total loss in some cases...you won’t get prime rental dollars to make up for the money owed on the house. The second problem is who would manage something like this? Neither Fannie Mae or Freddie Mac are designed to handle something like this. You need an organization that handles the money and fixes homes when necessary. I would predict that third entity has to be created out of thin air...to run something like this.


12 posted on 08/09/2011 7:04:43 PM PDT by pepsionice
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To: mkleesma

Does the banks have clear titles to all these properties. No investor will buy it unless this is cleared up. Guess fed will come up with a law to loosen this requirement or a shortcut (issue new fed titles that replace old title) thus immunize the banks screwup and investors risk of buying the houses. In other words, gov will interfere with the conventional property laws and screw everything up for the regular home owners.


13 posted on 08/09/2011 7:06:12 PM PDT by Fee
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To: LearsFool

‘seek investors’ ideas’-

And that’s supposed to mean something more than the faux headlines.???


14 posted on 08/09/2011 7:06:26 PM PDT by Freddd (NoPA ngineers.)
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To: maggief

“A national property-management business would handle the day-to-day landlord responsibilities. Investors would pay for rehabbing and maintaining properties and would share revenue from monthly rental income and the ultimate sale of the property.”

The potential for “unintended consequences” is mindboggling.

Just imagine how much the value of the properties could rise after they’ve been rented out to people that the government would favor. /S


15 posted on 08/09/2011 7:07:51 PM PDT by paint_your_wagon
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To: maggief

Forget this considering the kind of people they would rent to. Just blow up your neighborhood and be done with it.


16 posted on 08/09/2011 7:07:56 PM PDT by arrogantsob (Why do They hate her so much?)
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To: upchuck

Various “projects” come to mind. You know the FDR federally finance high-rise apartment buildings that have become synonymous with slum projects. Cabrini-Green is a prime example.


17 posted on 08/09/2011 7:07:56 PM PDT by doc1019 (You do not need a parachute to skydive. You only need a parachute to skydive twice.)
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To: maggief

...because centralized planning and meddling has been so helpful in every other area they’ve tried it.


18 posted on 08/09/2011 7:08:00 PM PDT by lurk
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To: barstoolblues

What’s amazing is that living under FDR had to be much worse than this. Can you imagine? 4 massive landslides? Oy.


19 posted on 08/09/2011 7:08:30 PM PDT by Huck
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To: YankeeReb

You have to give Baraq credit.

He may have been a screw-off student in college, but when
he got his Masters in “Operations” from the Chicago political mob, he learned well.


20 posted on 08/09/2011 7:09:03 PM PDT by nascarnation
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To: arrogantsob

I agree with you 100%.


21 posted on 08/09/2011 7:11:08 PM PDT by kevslisababy
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To: maggief

Would you vote against your landlord?


22 posted on 08/09/2011 7:11:13 PM PDT by tsowellfan (Let's make the 2012 campaign: "The War on Error")
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To: maggief

Ghetto Redistribution—sending the inner city to your neighborhood.
Death of The Suburbs


23 posted on 08/09/2011 7:14:13 PM PDT by two23 (Liberals Have Created a Culture of Lies)
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To: maggief

Right, what better way to get the meth cookers out into suburbia where they can cause the maximum damage to what’s left of society?


24 posted on 08/09/2011 7:15:02 PM PDT by Let's Roll (Save the world's best healthcare - REPEAL, DEFUND Obamacare!)
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To: pepsionice
You need an organization that handles the money and fixes homes when necessary. I would predict that third entity has to be created out of thin air...to run something like this.

And like everything else, it will never go away.

Lets say that you are an investor in single family rental property, and the government just announces that they are going to raise your taxes so that they can move in and compete with you using your profits to underwrite the usual bureaucracy that will [mis]manage the growing rental real-estate portfolio that the government will amass.

It is no different if the mob moved into your neighborhood and demanded that a percentage of your rents are diverted to them running rental properties across the street offering lower subsidized rents to undesirables who will drive down market values.

Years ago, I came up with the theory that the best house to buy was in a neighborhood where the bathrooms equaled the number of bedrooms. Generally speaking, to afford that home required two incomes, or one real good professional income. In the event one or more adults in that household developed bad habits like drugs, adultery or gambling, the family couldn't afford to stay there and would be compelled by market forces to move. It was a self-cleansing ecosystem.

With the government getting into the rental property business, they will bring in the dregs of society and instead of evicting the miscreants that tear the property up and make the neighborhood a regular stop for police and SWAT teams, you get to watch your investment portfolio plummet - not much unlike we are watching stocks and bonds fall.

25 posted on 08/09/2011 7:15:34 PM PDT by The Theophilus (Obama's Key to win 2012: Ban Haloperidol)
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To: arrogantsob
Forget this considering the kind of people they would rent to. Just blow up your neighborhood and be done with it.

No kidding. Repair and maintenance would exceed collections of the rent they'd never see. (unless it was coming from the government teat) Neighbors might start burning them down themselves after hearing this suggestion.
26 posted on 08/09/2011 7:15:47 PM PDT by ZX12R (FUBO GTFO 2012 !)
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To: tsowellfan

Yeah. I don’t see how this could go wrong. [/sarc]


27 posted on 08/09/2011 7:15:53 PM PDT by Brownie63
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To: pepsionice
The second problem is who would manage something like this?

Some bureaucracy that does not yet exist. Forming this agency will create jobs, don't you see?

28 posted on 08/09/2011 7:16:08 PM PDT by mlocher (Is it time to cash in before I am taxed out?)
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To: maggief
We all live in Section 8 housing now.
29 posted on 08/09/2011 7:16:56 PM PDT by E. Pluribus Unum (Palin is coming, and the Tea Party is coming with her.)
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To: pepsionice

Then there is the issue of renters that trash the place, etc. The government lacks the interest to maintain the value of the property.


30 posted on 08/09/2011 7:16:59 PM PDT by Cboldt
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To: pepsionice

This SAYS that investors would buy the properties and be responsible for upkeep and a “nationwide” entity would act as landlord. First of all, you’re right. That will be a new government agency.

Second, who will the investors be? I’d bet my last dollar it’ll be the same people who foreclosed on the properties. Chase, Wells Fargo, BOA....and the prices will be dirt cheap.

These properties were already paid for by TARP. Now the banks will get them back for pennies on the dollar then rent them out.

If this is such a good idea why not let the people living in them now deed them back then start paying rent. I’ve got a house they can have if they want it. And I’ll rent it back from them for half of what my payment is.


31 posted on 08/09/2011 7:18:07 PM PDT by Terry Mross (I'll only vote for a SECOND party.)
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To: mkleesma

Crack houses, meth houses, prostitution. All paid for by our taxes. Great.


32 posted on 08/09/2011 7:18:17 PM PDT by refermech
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To: Freddd

It means who agrees with what we ARE going to do and will support our social programs and make some stash on the way.

How about just putting the damn things up for auction like they are supposed to?


33 posted on 08/09/2011 7:20:14 PM PDT by Sequoyah101 (Half the people are below average.)
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To: arrogantsob
"Just blow up your neighborhood and be done with it."

Soon HOA's all over America will start burning down fore-closed properties to save their own property values.

34 posted on 08/09/2011 7:21:31 PM PDT by Flag_This (Real presidents don't bow.)
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To: maggief

Next step will be that the Goobermint decides who lives where (and they take the great homes due to their importance to society).


35 posted on 08/09/2011 7:22:56 PM PDT by MtnClimber (A government powerful enough to tell you what to eat can tell you when you can breathe.)
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To: maggief

Barry’s plan is coming together. Socialism/Communism here we come!


36 posted on 08/09/2011 7:23:43 PM PDT by FlingWingFlyer (Americans need to wean their government off of its dependence on foreign money.)
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To: Cboldt

Section 8 on super steroids.


37 posted on 08/09/2011 7:25:06 PM PDT by umgud
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To: LearsFool
Fannie and Freddie are buying loans which is odd since they have no money. I refinanced my home it was with the same lender I had it with. Couple of months went by and I got a notice that Fannie had bought my loan but Citibank would still service the account. I think they are trying to
eliminate private property. If I were to default on my home
the government or Fannie who is subsidized by the taxpayer
will own it and then they can rent it out to whomever they want. Why don't they just sell the homes instead of renting them it makes no sense other than they don't want people owning them.
38 posted on 08/09/2011 7:27:56 PM PDT by funfan
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To: maggief
Just what my wife predicted. Looters moving into our neighborhoods.
39 posted on 08/09/2011 7:28:43 PM PDT by Nuc 1.1 (Nuc 1 Liberals aren't Patriots. Remember 1789!)
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To: umgud
"Section 8 on super steroids."

And when they don't pay the rent, sell the appliances, the copper wire and whatever else they can get their hands on they will go looking for the next handout.

40 posted on 08/09/2011 7:29:50 PM PDT by Anti-Bubba182
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To: maggief

Well shovel ready jobs didn’t work out so well but slum ready housing will certainly be in your neighborhood real soon.


41 posted on 08/09/2011 7:31:24 PM PDT by Graneros ("It is no exaggeration to say that the undecided could go one way or another.")
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To: maggief

Well, we all know what has happened with government housing in the past, don’t we?


42 posted on 08/09/2011 7:32:53 PM PDT by Real Cynic No More (The mighty zero, obama,does not warrant the respect necessary for his name to be capitalized.)
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To: maggief
before they become Section 8 housing BURN THEM DOWN!!!!!

Otherwise sell them on the open market to whoever has the cash!

43 posted on 08/09/2011 7:33:50 PM PDT by dalereed (uity wise!)
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To: maggief

Great idea!!!

Nearly free rent for those receiving Obama’s free money.

Will these rentals be restricted to Blacks, Mexicans and Union members?

See people, Obama really does care about America.... just not your America.


44 posted on 08/09/2011 7:34:39 PM PDT by Gator113 (Palin 2012, period.....)
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To: Terry Mross
Second, who will the investors be? I’d bet my last dollar it’ll be the same people who foreclosed on the properties. Chase, Wells Fargo, BOA....and the prices will be dirt cheap.

Short selling the properties to themselves isn't going to make money. They don't need to; they already own the properties outright. Short selling a fraction at a time is just cut their losses without collapsing the market, and the banks are dragging their feet like you wouldn't believe to stretch the process out. California is full of 1/2 million dollar homes that the owners aren't paying on, because the owners know the banks won't foreclose. The banks don't want the land, they want payments.

The idea that the banks want these properties for 'pennies on the dollar' sounds good, but in reality, it's like getting a free foot by sawing your own foot off.

I deal with this every day, and believe me, the banks do not want these properties coming off the market en mass and at a fraction of the cost. The shadow inventory of real estate in California alone is enough to atomize the market of the entire state if it were all to be pushed back into circulation at a lower price. It would drag everything down with it, as well as have secondary effects like putting financially irresponsible people into 'cheap housing' in nicer neighborhoods, who don't really care to mow their lawns, turn down the music, or put their Rottweilers on leashes. You think Uncle Sugar is going to evict any of these fine constituents?

This plan is a Section 8 doomsday scenario. Especially if it's written by the same people that wrote Dodd-Frank. The only ones who would benefit would be voters that support this and actually move into a 30 Year Obama Home, the new bureaucrats that wind up running this monster agency, and whatever investors play ball for government bennies. If any. The 'investors' are probably going to be taxpayers, forced to fund this wealth redistribution behemoth.

45 posted on 08/09/2011 7:36:16 PM PDT by Steel Wolf ("Few men desire liberty; most men wish only for a just master." - Gaius Sallustius Crispus)
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To: maggief

Is there no end to this madness.....???


46 posted on 08/09/2011 7:36:56 PM PDT by Victor (If an expert says it can't be done, get another expert." -David Ben-Gurion, the first Prime Minister)
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To: maggief

THis article proves that having gotten possession of private property by making it NON-PROPERTY thru the legislatively allowed banking and mortgage servicing practices, the US govt intends to redistribute it, in this case by renting, properties that have no titles, no notes, no actual county registrations of transfer as a result of bank mortgage servicers fraudulently destroying (think MERS,etc), deleting, losing, not filing legal documentation regarding sales and transfers. Taxpayers are liable for the losses already. Govt has committed a massive crime by making real private property non-property for its use. It is worse than destroying a $100 bill by burning it, a Federal Crime...and this property Federal Crime is the trillions of dollars of potential risk with Fannie and Freddie, with several trillion dollars of sub-prime securitized mortgages with no...papers.

There are millions of other mortgages not being foreclosed on by our largest banks as they have no capital reserves to bring them back on the books from level 3, and the US courts are not in support of property foreclosures with absent legitimate papers. Bank of America is in big trouble over this currently especially, but not exclusively with Countrywides mortgage assumptions. Will these properties be laundered somehow by the banks with Fed Reserve and Executive branch help, by somehow renting them or selling/transferring them in lieu of foreclosures...such as repackaging them for sale to pension funds?? LAUNDERING what is essentially...non-property?

The US govt. is distributing property by renting that cannot qualify for foreclosure because it is.....non-property. If it was not for the de-legitimization of property, the property could be marked to market at prices that would NOT sustain housing prices at current levels. So, it has to be redistributed, somehow, by Fannie and Freddie in the above case by the US government.

All such mortgages by the millions seem to be permanently out of the private arena and probably all will end up in the federal arena. The Fed govt is in the housing redistribution and financing and rental business not owned by anyone, but controlled by the US government...JS

The property situation seems like the situation of Taiwan, an unincorporated territory of the US obtained by the 1951 Treaty of San Francisco, not legitimate for sovereignty, with no “papers”, but subject to the US Congress for permission to operate a government. Property is in limbo for lack of papers, and is in the hands of the US govt. to do with what it pleases.


47 posted on 08/09/2011 7:38:14 PM PDT by givemELL (Does Taiwan eet the Criteria to Qualify as an "Overseas Territory of the United States"? by Richar)
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To: Steel Wolf

Again, I believe TARP went to these banks. Remember, they were called “toxic assets”. That means they’ve already been paid.


48 posted on 08/09/2011 7:39:19 PM PDT by Terry Mross (I'll only vote for a SECOND party.)
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To: Gator113

It’s Obama’s plan to get hip-hop into the ‘burbs.


49 posted on 08/09/2011 7:44:29 PM PDT by Thrownatbirth (.....Iraq Invasion fan since '91.)
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To: Terry Mross
Again, I believe TARP went to these banks. Remember, they were called “toxic assets”. That means they’ve already been paid.

The bank 'paid' for the house when it covered the loan. It's their house. Now the bank is sitting on 5 years worth of inventory of 500k homes it can only sell for 250k. They don't want a five year supply of 250k houses. They don't want to get rid of them on mass, because that would hurt their other investments. They want the 2 million dollars in interest they'd get on a 30 year mortgage per 500k house. Not a million dollars in interest they'd get selling it at 250k. (I'm oversimplyfying, but you get the idea.)

It's the payments and the interest that the banks want. Buying land cheap doesn't do them any good if they have to sell it cheaper and foreclose on it in a year.

This ObamaHome deal would introduce 'stability' into the market by forcing homes to be 'sold' to some government agency or 'investor group', and then controlled like Army post housing. I imagine they'll make the tenants 'pay' by deducting the money out of their welfare checks (after adding in a housing allowance) and deliver that money to the government property managers to convince America that ObamaHome is turning a profit.

50 posted on 08/09/2011 7:55:00 PM PDT by Steel Wolf ("Few men desire liberty; most men wish only for a just master." - Gaius Sallustius Crispus)
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