Government-owned homes may get ‘for rent’ signs

[alp227]

Source: The Washington Post

The Obama administration Wednesday went searching for creative answers to a perplexing question: How can the government rid itself of the glut of foreclosed properties it now owns in a way that nudges the housing market toward recovery?

As the housing crisis has persisted, government-backed mortgage giants Fannie Mae and Freddie Mac, along with the Federal Housing Administration, have taken possession of hundreds of thousands of foreclosures throughout the country. But selling those homes at decent prices in an abysmal market has proven difficult.

That quandary led the Treasury Department, the Federal Housing Finance Agency (which oversees Fannie and Freddie) and the Department of Housing and Urban Development on Wednesday to put out a “request for information” seeking imaginative ways to clear the backlog, particularly by turning foreclosed properties into rentals.

“It’s critical that we support the process of repair and recovery in the housing market,” Treasury Secretary Timothy F. Geithner said in a statement. “Exploring new options for selling these foreclosed properties will help expand access to affordable rental housing, promote private investment in local housing markets and support neighborhood and home price stability.”

Read more: http://www.washingtonpost.com/business/economy/government-owned-homes-may-get-for-rent-signs/2011/08/10/gIQAxXaM7I_story.html

[ChrisBorg]

1. As a landlord for over 20 yrs.....good luck with that.

As the Govt, how are they going to look evicting people for failure to pay rent?

[coalition_unwilling]

15. Maybe the government should do with unpaid rents what it has done

with defaulted studnet loans, i.e., make them undischargeable through bankruptcy, thereby completing the indenturing of another segment of the American working class.

:sarcasm:

[Hestia]

2. Give them away to the chronically homeless & unemployed

It's cheaper and more humane that sending money to a line item for programs in these areas.

[grahamhgreen]

4. It's a no-brainer.

[jwirr]

9. Give them to Habitat for Humanity to give away after making sure

they are repaired. Let HfH charge the cost of repair in the same way they now charge for the cost of building. No interest and only cost. The government should ask for proposals for action on this program and accept the best ones.

The most important statement in this was "affordable housing". That comes straight out of the HUD programs that require housing to be rented at only 30% of the renters income. However, that is usually done by subsidizing the costs of rent about that 30%. When I lived in a high rise I paid only $174 rent a month while government paid the rest. Actual cost for my handicap apartment was $600. The rethugs would have a fit if we added more public housing.

[snooper2]

20. And when the A/C and furnace go out who is going to fix it?

[slackmaster]

25. What happens when the people in their "free" houses can't pay property taxes?

State and local governments suffer.

[Drale]

3. How about a rent to own thing

People come in live in the houses, pay a bit of money after so many years they own the house.

[Lance_Boyle]

19. That's called a mortgage. n/t

[Drale]

21. Well if the government owns them already and

wants to get rid of them, they could give out mortgages on them at 0% interest. What would be so bad about that?

[No Elephants]

23. The government is not set up for that. No matter what we do, it will cost

more to set up a new program and administer loans, even at zero interest, than it would to give the properties away.

And even zero interest does not guarantee the payments will be made. Then, we get bad pr from foreclosing.

We could pay banks and their lawyers to handle the loans, foreclosures, etc., but that would stick in my craw and I am probably not alone. And that still does not relieve government of bad pr.

How about issues of inspecting the properties and making sure they are habitable, too. If we mess up on that, we'll be sued.

Can of worms.

[No Elephants]

22. IMO, it's a bad idea for government to be a landlord. We donj't need to create

a sub-from of bureaucracy and we don't need landlord liability if pipes break, furnaces break down, roofs leak, etc.

And we don't need bad pr from evictions or getting stuck housing people who refuse to pay.

type edit

[aikoaiko]

5. Thousands of property managers' ears just perked up.

[Hoyt]

6. I like the idea. Even in the worst scenario it's not going to cost more than it does now.

Plus, it might make a real difference in some folks' lives.

[sense]

7. A large part of the problem

is that they won't sell those foreclosed homes.... We tried to buy one....made them a cash offer, higher than some of the other condos in the building sold for..... they wouldn't take the offer! They've now marked it down to within a couple thousand of what we offered them.... and it's still sitting there. We've discussed what happened with some realtor friends... and investors.... Apparently our experience is typical and it can take more than two years to get Freddie Mac to budge on selling something. The realtors have started to refuse to proceed when they find out people want to buy foreclosures, because they've worked and worked to get things sold and the gov. won't move. I realize that adds to the problem, as do the realtors, but they don't know what else to do.

I don't understand how that benefits anyone, except that it certainly helps to keep the economy down. Winning situation for the pukes!

[glinda]

8. Yup. When everyone ends out on their patootie, the cash will still roll in as our

Government becomes a landlord.
I can see that only the wealthy and the Gov. will own everything.

[sweetloukillbot]

10. That might explain what happened to me...

When we lost our house we had a cash offer on the table for $50K. The bank turned it down and the house sold at auction for $20K. We didn't know we were Fannie/Freddie although apparently at some point they entered into the mix - I know they weren't the initial lendors (or the ones we were paying our mortgage too), but they were involved when we did the short sale paperwork...

[ChrisBorg]

12. How much was the mortgage when they offered you 50K?

[sweetloukillbot]

18. We owed $200K, it was valued at 75K

We were hoping the bank would mod it down to around $125K - we would've been satisfied w/ that. They ended up offering a great fixed rate, but w/ all the interest and penalties tacked on to the principle the payment would've only dropped $25 a month. We let them take it and declared bankruptcy - and I feel no shame whatsoever over my decision - maybe a little regret in not owning anymore, but not much. If it looks better for them to lose $180,000 rather than $150,000 or $75,000, fuck em.

[MannyGoldstein]

11. So we'll give cash to Job Creators to buy houses

After subsidies, the Job Creators will have paid next to nothing for houses that they'll rent out for big cash profits.

That's how it will end up. Mark my words.

[indurancevile]

13. that sounds like a likely scenario. & it would explain the talk i hear from

those quarters about how people should stop thinking they're going to own their own homes & how in the past too many people were allowed to have such a luxury. as well as the talk of dropping the home mortgage deduction.

[JoeyT]

14. +1

It's been such a long time since we had Pullman towns, I guess we'll have to do it again to learn why they suck.

[coalition_unwilling]

16. Thank you. As I suggest in my post #15, this idea has almost

nothing to do with helping the working class and everything to do with comforting the already comfortable.

And to think I enthusiastically supported Obama in 2008, volunteering both $$ and time.

Won't get fooled again.

[indurancevile]

17. omg. you were right.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1714748

[No Elephants]

24. Givve the properties to cities and towns to fix for affordable housing.

Give them some money for repairs, too, if need be.

That would be less expesnsive than continuing to own these places and creating more bureaucracies to do whatever needs to be done.

[mia]

26. Companies such as this one seem to specialize in the present scenario.

http://www.tenantaccess.com/integrated_solutions.html

Rental Investment Program (RelP)
The TenantAccess Rental Investment Program provides a simplified means for investors and lenders to generate cash flow from a portfolio of residential rental properties. The evolving housing and rental market is enabling the savvy investment strategist to purchase single family residential properties and/or multi-family buildings in rebounding communities, generate monthly cash flow from the asset and subsequently dispose of it upon its growth in real estate value....

PTAFA Management Program (PMP)
The TenantAccess PTAFA Program is a turnkey solution for banks, servicers and property managers who face the challenges of responding to the Protecting Tenants at Foreclosure Act....

PTAFA Management Program (PMP)
The TenantAccess Deed in Lieu Lease Program enables mortgage holders to approach at risk homeowners proactively with the option to convert their lien into a lease and to stay in their home as a tenant. This allows the lender to avoid costly foreclosure expenses and allows homeowners to avoid damages to their financial and personal well being....

PTAFA Management Program (PMP)
The TenantAccess Rehabilitate and Resell Program enables qualified investors an easy means to buy, rehabilitate, and ultimately sell large quantities of distressed properties. The attractiveness of the bailout program is bringing many new institutional investors into this market....