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According to WH sources, the Obama Administration and the FHFA are close to announcing a pilot...

According to WH sources, the Obama Administration and the FHFA are close to announcing a pilot program to sell some of the 250K (with millions more in the pipeline) Frannie-owned foreclosures in bulk to investors. Expected to start in the near-future, officials are working on details, including what experienced private investors the government can partner with.
Comments (16)
  • Tony Petroski
    , contributor
    Comments (6373) | Send Message
     
    We started out with mortgage backed securities and real-estate junk offloaded to Fannie and Freddie.

     

    Now we're seeing the 3rd act with foreclosure securities ("with millions more in the pipeline").

     

    The sooner the market can clear, the faster the healing. Keep in mind that the "new normal" of "faster healing" is now measured in decades.

     

    It's certainly a boom time for attorneys, always the bane of developers and real-estate salesmen. The government has an important role to play: make clearing titles to property easier and cheaper. Unfortunately, the government is made up mostly of attorneys and very few developers, real-estate agents, and even fewer carpenters, electricians and plumbers.

     

    "You ain't heard the last of me!"
    -- Joe the Plumber
    9 Jan 2012, 09:41 AM Reply Like
  • apberusdisvet
    , contributor
    Comments (2962) | Send Message
     
    The $1 billion publicized need for Obama's re-election is lagging in contributions. Oh wait; the real estate industry has big bucks; let's go all in on croney capitalism.
    9 Jan 2012, 09:46 AM Reply Like
  • calvinl
    , contributor
    Comments (18) | Send Message
     
    apberusdisvet is right on. this should have been job on 3 years ago! Now it is political games, and likely no significant action anyway.
    9 Jan 2012, 10:32 AM Reply Like
  • Swass
    , contributor
    Comments (419) | Send Message
     
    I will offer them $1 for the first 250K mortgages, plus an additional $2 for each million thereafter.
    9 Jan 2012, 11:08 AM Reply Like
  • bricki
    , contributor
    Comments (1099) | Send Message
     
    You might find that you will take a loss on your offer.
    9 Jan 2012, 11:25 AM Reply Like
  • Tony Petroski
    , contributor
    Comments (6373) | Send Message
     
    I'm afraid Mr. bricki is right (bricki: I take it from your photo that you're a Viking or Viking fan and not the devil incarnate).

     

    Swass is on his way to a loss as he's failed to factor in the onslaught of litigation heading his way as "owner" of foreclosed properties.
    9 Jan 2012, 12:00 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10612) | Send Message
     
    Since very few actual people were assisted by plan A to give distressed home owners relief I have little faith that this plan will clear much of the shadow inventory or clean up the overhang.
    9 Jan 2012, 12:37 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11765) | Send Message
     
    Sadly Fannie and Freddie are endless public money sucking pipes. I would be for this if they are actually seeking to close these down and end the concept of government backed riskless home mortgage lending which helped us get into this mess in the first place, made banks rich without reason, cost the taxpayers a boatload, crashed the housing market, and led to mass overbuilding that will take a decade to resolve.

     

    Unfortunately, this will probably be used to help them clear off assets off their books so they can keep lending more and losing more as the packages of loans they sell come with new government guarantees which will mean more risk and public cost. This seems like a hoax to help Freddie Mac stay solvent and lend more in an election year.
    9 Jan 2012, 12:49 PM Reply Like
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    This is actually a positive for the housing market. Eventually the properties have to come off the books and any market disruption will be minor at the very least.
    9 Jan 2012, 02:13 PM Reply Like
  • t_jeffer
    , contributor
    Comments (17) | Send Message
     
    "officials are working on details, including what experienced private investors the government can partner with."

     

    I believe you have a few misspelling in this phrase. I think it should be:

     

    "officials are working on details, including which of their cronies are going to get rewarded with the chance to buy properties at below market value."
    9 Jan 2012, 02:36 PM Reply Like
  • Innocents Abroad
    , contributor
    Comments (11) | Send Message
     
    if we flood the real estate market with firesale properties, it will draw down the valuations of all other properties, good-standing or not. The real estate bubble inflated years ago because it was a pyramid; valuations increased because of the promise of more money as the bubble expanded

     

    But fundamentally, the money was never there to begin with. Rapid-Asset-Turnover-O... jacked up the profits for those investors at the top of the heap, they made the most from the derivatives and got out early.
    9 Jan 2012, 03:03 PM Reply Like
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    If anything the draw down will be over quickly as investors seek to flip the properties on the rebound.

     

    This is what happened with the RTC and the S&L crisis. The government is not in the business of managing properties so getting them off the book and realizing losses is a huge first step.

     

    Yes it drags down prices but that is a temporary phenomenon.
    9 Jan 2012, 03:08 PM Reply Like
  • robert.b.ferguson
    , contributor
    Comments (10612) | Send Message
     
    Just who do you suppose will be buying those properties? With real unemployment around 17% there just isn't allot of appetite for real estate right now. Why do you suppose all of that shadow inventory exists? Could it be because there are no buyers?
    9 Jan 2012, 03:58 PM Reply Like
  • chasag
    , contributor
    Comments (14) | Send Message
     
    Why not offer to sell the mortgages to the home owners. Some of them have money and could pay their mortgages of at a discount.
    9 Jan 2012, 03:09 PM Reply Like
  • phxcrane
    , contributor
    Comments (504) | Send Message
     
    Won't this put a lot of homes on the rental market? Therefore lowering rent prices? Good for renters bad for builders. Once again Government intervention will have unintended consequences. Of course there is the theory Obama is just buying votes.
    9 Jan 2012, 05:25 PM Reply Like
  • randy3x
    , contributor
    Comments (3) | Send Message
     
    “If you put the federal government in charge of the Sahara Desert , in five years there’d be a shortage of sand.” ~ Milton Friedman
    9 Jan 2012, 07:19 PM Reply Like
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