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 ...
Well shovel ready jobs didn’t work out so well but slum ready housing will certainly be in your neighborhood real soon.
Well, we all know what has happened with government housing in the past, don’t we?
Otherwise sell them on the open market to whoever has the cash!
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.
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.
Is there no end to this madness.....???
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.
Again, I believe TARP went to these banks. Remember, they were called “toxic assets”. That means they’ve already been paid.
It’s Obama’s plan to get hip-hop into the ‘burbs.
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.
I don’t doubt it.
That is not fair. They need to lock in their losses just like they are trying strong-arm the banks into doing. . . thieving hypocrites.
THEY_GET_TO_LIVE_IN_A_NICER_HOUSE_THAN_ME_PING!
The renters will destroy those homes.
Section 8 for the masses.
Give them some credit. These homes will be nicer than the ones they left behind in Mexico.
...
What? You don't think they're going to check your nationality or papers when you rent an ObamaHome, do you?
Geez! I bet that was once a gorgeous home. I love brick houses, though I can’t afford to live in one - well, maybe that one.
Good Idea , rent out the foreclosed home-—and when they leave you will get back a destroyed home that you may as well have torn down in the first place.
The banks don’t want to sell those houses because if they had to mark to market their REAL value, the banks, all of the TBTFs, would be INSOLVENT.
So, people have been paying into a system that has basically STOLEN the basic idea of OWNING a home. The government is going to steal ALL the homes aren’t they? Can’t let anyone be able to leave a crime and drug infested neighborhood anymore. NOPE.
Not even be able to get away from the perv half way houses.
Can’t have that. So much more important to keep the banks OK. That’s the MOST important thing of all, eh?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.