Clearly, the market is not functioning as it should. Despite near-record-low interest rates, credit conditions remain tight for many consumers and investors interested in buying or refinancing residential real estate. Moreover, the lack of sufficient numbers of buyers and sellers may limit price discovery, which heightens uncertainty about the â€œrightâ€ price for a given piece of real estate and further limits activity. In addition, the large number of foreclosures and a protracted foreclosure process have led to an unprecedented level of bank-owned homes, a level that is likely to persist for some time.
So how do we move forward in these difficult circumstances?
In August, the Federal Housing Finance Agency (FHFA), working with the Treasury Department and the Department of Housing and Urban Development, issued a request for information seeking ideas for the disposition of REO owned by Fannie Mae, Freddie Mac, and the FHA, including ideas for turning these properties into rental housing. Together, the GSEs and the FHA hold about half of the outstanding
REO inventory and so may be able to aggregate enough properties to facilitate a cost-effective rental program in many markets.
No. No. No.
Call me a simpleton, but I don’t see “become a landlord” anywhere the the federal government’s enumerated powers.
Until the Federal Government stops trying to “fix” the housing market, recovery is going to be delayed. EVERYTHING they do injects uncertainty, fear, concern and uncertainty into the economy and housing market.
(hat tip: The Big Picture)