Fundamental transformation proceeds apace, from the “ownership society” straight to neo-feudalism.
The Obama administration may turn thousands of government-owned foreclosures into rental properties to help boost falling home prices.
The Federal Housing Finance Agency said Wednesday it is seeking input from investors on how to rent homes owned by government-controlled mortgage companies Fannie Mae and Freddie Mac and the Federal Housing Administration.
That would be, the recently downgraded Fannie Mae and Freddie Mac. Moving along.
At the end of last month, the government owned roughly 248,000 foreclosed homes, officials said. About 70,000 of those are listed for sale. But officials expect the number of foreclosures to soar in the coming months.
Many foreclosures have been stalled so attorneys general and federal regulators can investigate whether lenders cut corners and improperly handled thousands of cases. Once a settlement is finalized, foreclosures are expected to pick up again and further depress home prices.
Converting the homes into rentals may reduce “credit losses and help stabilize neighborhoods and home values,” said Edward DeMarco, acting director of the Federal Housing Finance Agency, which oversees Fannie and Freddie.
And, not to put too fine a point on things, renting your home from the government raises all kinds of liberty questions. If they don’t like your politics, can they find a way to evict you? Can they tell you what to do (more than the government already does) in the home you’re renting from Uncle Sam? With a president hitting 51% disapproval, an IRS that’s become notorious for political audits and federal law enforcement agencies known lately more for gunrunning than crime stopping, that’s not an idle question. Would the feds allow renters to own firearms in these government homes? The majority of renters between now and 2012 are likely to be people who don’t like their landlord, but the landlord has, shall we say, serious firepower superiority. There’s a great deal to ponder here.
My remedy for this would be to disband Fannie and Freddie and spin these foreclosures off in auctions. The latter would probably end up spawning a slew of new rental and renovation-based businesses and might help correct the housing depression without creating yet more hazard for a government that’s already broke. I’m sure there are a million problems with both ideas, but none of those problems equal the implications of the federal government turning into a landlord for millions of American families.
GREAT! Now the Federal Government is becoming like the mining companies of the late 19th and early 20th centuries. Work for the company, purchase goods from the company store and rent the company homes. I guess the real question is whether the government will stop at universal serfdom or march on to creat one large plantation.
Once the government rents the houses, which will require a whole new bureaucracy, do you think the government will ever sell the houses or just stay in the rental marklet forever?
So let’s see, you loose your home to foreclosure, it goes to the government, and then ( because they don’t know how to make money) they rent it back to you for 1/2 price. LOL what a deal. Oh and lets factor in the poor, you spread them around, we must have equal crackhead distribution in our communities
dave…well lets see now. If the people hadn’t signed on the dotted line for the government to back their housing loan….oh, it wouldn’t belong to the government would it?
No shortage of hypocrisy is there?
Thought they learned their lesson from the Projects in the 70′s. That didn’t end well. Govt owns something like %80 of the mortgages already and they are snapping up land at speed. This is very, very bad.
“Many foreclosures have been stalled so attorneys general and federal regulators can investigate whether lenders cut corners and improperly handled thousands of cases.”
Most of the lenders were FORCED to make these bad loans to people who had no way of repaying them. It is called the Community Reinvestment Act, and it was signed by James Earl Carter, and beefed up in the first 2 years of the Presidency of Monica’s boyfriend.
I think you understate the potential problem. If the government starts renting out properties I fear it would soon turn into Section Eight Housing to the Tenth Power. The desire to use this for experiments in social engineering would be irresistible for the elements of the “social justice” bureaucrats and their champions.
I shudder to even think about it.
“Many foreclosures have been stalled so attorneys general and federal regulators can investigate whether lenders cut corners and improperly handled thousands of cases.”
It is NOT the fault of the lenders. The Community Reinvestment Act (signed by Carter, beefed up by Monica’s boyfriend) forced lenders to hand out loans to people (mostly minorities) who had no business getting loans.
Put the blame exactly where it belongs…on the shoulders of the Democratic Party.
Bryan, you are precisely correct that open-cry auctions held every month, initially without any reserve prices established, are necessary to set a market price for these distressed properties and then massively dispose of them all. Moreover, the government has historic experience with such auctions. In the midst of the thrift crisis (early ’90s), both the FDIC and RTC experimented with such auctions and they became the preferred method for disposing of both commercial and residential REO, primarily because Bob Rubin & Roger Altman insisted on huge book value writedowns on banks and S&Ls in receivership each and every quarter. Hundreds of millions of dollars of REO were sold off.
The Obama administration proposal is fraught with potential corruption. First, the effort will involve well-heeled investors (hedge funds, private equity firms, Goldman-led investor groups) bidding for lots of 100s of homes at a time. They will then contract with large property managers of national repute. The properties will be encumbered by land use restriction agreements, most likely requiring set asides for affordable housing. HUD will likely oversee the owners and contractors. ACORN’s successors & favored brokers will act as go-betweens to place renters. And the renters will be dependent upon distant and unresponsive owners & managers. Can you see all the interstices in which graft and influence-peddling will crop up in this scheme? A catastrophe wrapped in side a disaster inside a calamity.
It also opens up a can of worms for corruption and favoritism. Who gets to decide which applicants get to live in specific houses (especially the very nice ones) and what rent they’ll pay. Cronyism means it’s a sure bet that politically connected “community organizers” and those who make the right campaign contributions will get the nicest houses at below market rental rates.
“Nice house you’re living in. Vote Democrat or you’ll be on the street.”
The government has been managing foreclosure on the propertties secured by government backed financing for a few years….suffering great economic losses.
Now whats the problem again, with the government and taxpayers recouping some of the losses? Oh! Silly me! I forgot! Obama is president!
No wonder the nation is in the trouble it is with the newer generations logic. Sink the damn ship because we don’t like the captain….whose really not the ships captain.
Good grief! I once argued with someone who thought that a lot of these foreclosed homes should simply be destroyed. My thought was that this would be a terrible waste of resources. But guess what…the 0bama administration has figured out an even worse waste of resources. If this comes to pass, I say burn or demolish the cursed things.
Can you think of a single government housing project that has not needed to be torn down in less than a generation as uninhabitable? Without a sense of personal ownership there is no desire to maintain a property.
Just in time for an election. Will coincidences never cease?
Can auto leases be far behind. After all, the big four expense categories are housing, food, medical and transportatiion, and other than Gubamint Motors, Amtrak, light rail, public transportation, Cars for Clunkers, and stiffing the Chrylser bondholders, Obama’s footprint in transportation has been light as a feather.