Currently they are nearly 200,000 repossessed homes in nation that are owned by
Fannie Mae, Freddie Mac.  This represents about half of the total unsold repossessed
homes in the nation.

In July, there was over an estimated 56,000 homes in foreclosure or one in every
239 homes in California according to the real estate information firm, RealtyTrac. 

This large amount of homes causes two issues: First, there is a glut of repossessed
homes putting downward pressure on home values in the market putting a damper on
economic growth.  Second, there is a demand for rental housing that could be
resolved by putting these homes into rentals.

The Obama administration announced plans for the government to take these properties
off the residential housing market and instead sell them off in bulk to private
investors, who would be required to convert them into rental units. The ultimate
goal would be to stabilize the housing market and bring down rents at the same time.

Meanwhile the Federal Housing Finance Authority in concert with the Treasury and HUD
have begun a Request for Information, (RFI) process seeking input on how to address
this issue.  See the following link; http://www.fhfa.gov/Default.aspx?Page=360b

The Federal Housing Finance Agency is pursuing the quest because of expectations
that housing prices will continue to fall if delinquent properties end in foreclosure,
rather than being converted to some type of income-producing arrangement

The government agencies are hoping a wide variety of market participants — such as
financial institutions, hedge funds, buyout shops and even municipalities, nonprofits
and community groups — will provide ideas and scenarios in which they would be
interested in buying packages of foreclosed homes owned by the U.S. government’s
Fannie and Freddie in “significant transactions.”

The regulators then plan to issue specific requests for business proposals from
potential investors interested in buying pools of foreclosed properties. One goal,
the Treasury Department indicated, is to help stabilize neighborhoods struggling
with foreclosed properties. The agencies hope to develop several programs that
address specific issues in particular geographic areas particularly hit hard by
foreclosures, such as California.

 
Tim Johnson
www.CaliforniaBusinessMinute.com