Saturday, March 10, 2012

Fannie Mae, What are you doing?

In late February it was announced  that  Fannie Mae  is offering to sell nearly 2,500 foreclosed properties to investors as part of a new federal initiative to aid the housing market by selling off distressed properties in bulk. In my opinion it is an over complicated plan and nothing more then a political stunt to give the impression that something real is being done. With millions of  empty and foreclosed properties on the market this is not even a small step at addressing the problem.

The Federal Housing Finance Agency released details of a planned pilot transaction under which the government-controlled mortgage-finance firm will offer the properties for sale to investors in bulk, but require those investors to rent them out. Of the 2500 properties about 1,700 are single-family homes and more than 525 are condominiums.

A mix of tenant-occupied and vacant properties in Atlanta, Los Angeles, Phoenix, Las Vegas, Chicago and parts of Florida will be offered for sale. Edward DeMarco, the FHFA's acting director said "This is another important milestone in our initiative designed to reduce taxpayer losses, stabilize neighborhoods and home values, shift to more private management of properties, and reduce the supply of [foreclosed] properties in the marketplace."

A Treasury Department counselor for housing finance policy, said in a statement that the initiative would aid "neighborhoods that were especially hard-hit by the housing crisis and will help meet the rising demand for rental housing in many communities." Investors will be required to post a security deposit and sign a confidentiality agreement before they receive access to detailed information about the properties. Potential investors are being asked to demonstrate their financial capacity and experience and detail their plans for the properties, which must be rented out for a specified period.

 This policy is just wrong. What is the benefit over selling them off individually to the highest bidder and being done with it?  I feel the "required to rent them out" requirement reeked of bureaucratic overreach, I'm also troubled by the "confidentiality agreement" as well as buyers "detailing their plans for the properties", this leads me to believe that the highest bid may not be accepted. This has the potential for more then a little corruption! 

No comments:

Post a Comment