Friday, August 5, 2011

Fannie, Freddie pressured to rent more foreclosures

I know of two people that are renting from the Bank.  Question when did bank go into the Real Estate Investment business?
Sen. Jack Reed (D-R.I.) sent a letter to the chief regulator of Fannie Mae and Freddie Mac, urging the two companies to convert their repossessed properties into rental units and pool them for sales to investors.
Fannie Mae repossessed 53,697 properties through foreclosure in the second quarter, roughly flat from the previous quarter. While that is down from more than 68,800 repossessions one year ago, Fannie said the total was artificially depressed due to extended delays in the foreclosure process.
These delays will continue to push expenses up and delinquency rates elevated for a company that has already pulled more than $104 billion in bailouts from the Treasury Department and reported another $5 billion in losses for the quarter.
"Moreover, Fannie Mae believes these changes in the foreclosure environment will delay the recovery of the housing market because it will take longer to clear the housing market’s supply of distressed homes, which typically sell at a discount to nondistressed homes and, therefore, negatively affect overall home prices," the company said in its financial report released Friday.
In his letter to Federal Housing Finance Agency Acting Director Edward DeMarco, Reed said the government-sponsored enterprises could install a major rental program that could milk at least some revenue out of properties otherwise sitting vacant.
In Rhode Island, alone, Reed wrote, the average monthly rent for a two-bedroom apartment increased 54% since 2000.
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