Hope you had a nice long weekend if you had yesterday off, and a belated tip-of-the-cap to Dr. Martin Luther King for the peaceful way that he traveled to bring equal rights to African-Americans, and to bring peace amongst the different races of people on our little planet.
Back in late summer, I wrote a post titled, "Feds Finally Keen on Rent to Own Housing", where we discussed a possible Government program aimed at selling bundles of foreclosed homes owned by Fannie Mae (FNMA) and Freddie Mac (FMCC), to real estate investors, with the properties converted into rentals. The key point here is that these homes will be sold in bulk vs. individually.
Fast Forward a few months, and the Government is hoping to "launch a pilot program in early 2012 to convert government-owned foreclosures into rental properties", in a story by Tami Luhby for CNN Money. Just last week, Federal Reserve Chairman Ben Bernanke cited the program as a possible way to help us get through the housing crisis, and per the article by Luhby, titled, "Turning foreclosures into rentals", Bernanke said that "Restoring the health of the housing market is a necessary part of a broader strategy for economic recovery".
After dropping mortgage rates down to historic lows, the Fed started thinking "outside of the box", and needed to find creative ways to solve the crisis. Perhaps after a prolonged stall in foreclosure procedures, the Fed sees the wave of foreclosures coming in their crystal ball, and as Luhby writes, there are close to 2 million homes in the late stages of delinquency, according to Lender Processing Services. These foreclosed properties can destroy home prices since they "often sell below market value", says Luhby.
By converting these homes to rentals, the neighbors are happy, the Fed is happy, and things can start looking better for everyone. What are your thoughts?
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Have a Great Week, and Happy Rent-to-Owning !
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TAGS: #MLK #MartinLutherKing #AfricanAmerican #RenttoOwn #FannieMae #FNMA #FreddieMac #FMCC #realestateinvestors #FederalReserve #foreclosedproperties #homeprices