Diana Olick of CNBC reported that a group of Government officials led by FHFA (Federal Housing Finance Agency) “is very close to announcing a pilot program to sell government-owned foreclosures in bulk to investors as rentals.” FHFA is overseer of Fannie Mae and Freddie Mac.
Olick’s Realty Check article, entitled “Government Set to Sell Foreclosures in Bulk,” indicates that officials are now working to resolve details such as market potential, pricing and property management concerns. Per Laurie Goodman of Amherst Securities, investors are raising cash “to buy properties on a large scale. But that means they have to build out a rental organization; it means they build out a management company, because if you’re accumulating a hundred homes in Dallas that’s very different than running a multifamily building.”
According to Jaret Seiberg of Guggenheim Securities, several pilots are expected. Seiberg projects that “Less fear about a flood of foreclosed homes hitting the market—could stabilize [home] prices.”
The Federal Reserve released its White Paper on Housing on January 4. The comprehensive report concluded that “A government-facilitated REO-to-rental program has the potential to help the housing market and improve loss recoveries on REO portfolios.”
The idea is not new. Administration officials issued a request for information in August and received 4,000 responses touting various versions of how to resolve the housing crisis and meet the demands of a catapulting rental market.
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