Sep 7, 2011 / Topic Ideas

Suggest a way for the government to get rid of foreclosed properties

Today’s prompt was inspired by a Bloomberg Businessweek article on msnbc.com, Uncle Sam is a reluctant landlord of foreclosed homes, written by Lorraine Woellert and Clea Benson.

Suggest a way for the government to unload foreclosed properties without swamping the already depressed real estate market.

Here’s some background information from the article:

For sale or rent by distressed owner: 248,000 homes. That’s how many residential properties the U.S. government now has in its possession, the result of record numbers of people defaulting on government-backed mortgages. Washington is sitting on nearly a third of the nation’s 800,000 repossessed houses, making the U.S. taxpayer the largest owner of foreclosed properties. With even more homes moving toward default, Fannie Mae, Freddie Mac and the Federal Housing Administration are looking for a way to unload them without swamping the already depressed real estate market.

Trouble is, they haven’t figured out how to do that. The government admitted as much in August, when Fannie, Freddie and FHA issued a joint plea to the public for ideas about how to solve the problem. (Give it your best shot: You have until Sept. 15 to email ideas to reo.rfi@fhfa.gov.)

“They’re stuck,” says Karen Shaw Petrou, managing partner of Federal Financial Analytics, a Washington-based consultant that advises banks and other clients on government policy. “They don’t know what to do.”

You can read the entire article here. Be sure to add a HelpFHFA tag to your post to make it easy for others to see your suggestion!

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  1. they could work with habitat for humanity – getting lower income families into homes – for people who are unfamiliar with their work – they are a great orgainization that deserves more attention!

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  2. Allow Canadians to buy houses in forclosure and in return receive a green card. What’s the big deal as we are first cousins anyway!

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  3. They are humans too need a great hospitality,attention and freedom to speak any problem has a solution

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  5. Why not remove the restriction on past homeowners who recently short sold a property? If they meet or surpass minimum credit standards and have stable employment, why not allow individuals in this category to re-enter the housing market? Bet there’s a fair percentage of people who could buy now, but can’t because of a 2-3 year waiting period after a short sale.

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  6. I suggest a lottery system, whereby only low and middle income families can participate. The price of each lottery ticket associated w/ a particular home is based on the estimated FMV of the home (i.e. a $20,000 home may only draw a $5 purchase price per ticket) These houses can not be used and rental properties, and must be lived in by the winning family a min. of five years.

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  7. I am the happy owner of a repossessed property bought on auction for well-below the market value. After searching the web for a decent site for repossessed property, I came across this site. The site is worth visiting, since the whole process of searching was done online, even the bidding.

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