Why doesn't the government (Freddie/Fannie owned homes) be landlords (foreclose, mortgage)
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Why doesn't the government just convert all these Freddie/Fannie REO homes into rental property and rent it out at fair market value.
Seems to involve less hassle, less distress sales. You can either kick out the former owners or rent it out to them (but don't let them ride it out) or just put it on the open market for rent.
Government deals with commercial real estate rents all the time. What different is the residential market. There will always be demand for housing, especially in urban metro areas. Plus since they own/rent out these homes, they can exert their massive power and command better rates in terms of repairs of these homes from contractors.
If things keep going the way they are now, the government and the banks will have to become landlords or no one will have a place to live. I don't want to see that, though. I'm hoping the government can get themselves out of this mess, then get the heck out of our way so we can fix this economic disaster.
They aren't really equipped to deal with selling properties. They definitely aren't equipped to be landlords.
Government contract out for work all the time. It's very easy. Why don't they just hire their management companies to do all the work. Most management companies take a 10% cut each month.
But if "X" foreclose home can still be rented out for $1500-2000 a month, it's still cash to the taxpayers. An empty home does not generate any revenue for the taxpayers.
A distress sale of a property only forces a realize loss by the taxpayers.
Everyone needs housing.
Let the contracted out management company manage everything. Everyone wins. Taxpayers get some much needed revenue back. Management companies get more customers. Less distressed properties on the market.
Than slowly they can start to dump these properties over the next 5-10 years.
Depending on what happens with Fannie and Freddie in the next 1-2 years, we may actually see a new property management agency created.
It makes good political sense - keep people in their homes, generate revenue, and create tons of government jobs in some of the hardest hit economic sectors.
I'd take it a step further - I'd like to see more property leasing to own. Let people get into a house, and make a payment like what a mortgage is, and then give a less difficult path to ownership after a 3-5 year lease.
Depending on what happens with Fannie and Freddie in the next 1-2 years, we may actually see a new property management agency created.
It makes good political sense - keep people in their homes, generate revenue, and create tons of government jobs in some of the hardest hit economic sectors.
I'd take it a step further - I'd like to see more property leasing to own. Let people get into a house, and make a payment like what a mortgage is, and then give a less difficult path to ownership after a 3-5 year lease.
But it all makes too much sense to ever happen.
Agreed.
Why do we keep on throwing good money for almost desire situations where people re-default almost 50% after a modification?
Collect rents, collect revenue, provide a home for renters (whether it's the original homeowners or new renters). It's a win win situation. Involving much less resources to taxpayers.
Freddie/Fannie are not in the business of owning homes. Their business is to bundle loans together and sell them to investors so that banks can have cash to loan to other people.
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