Federal Reserve Governor Elizabeth Duke called for government efforts to promote the rental of foreclosed homes, saying a recovery in the U.S. housing market hinges on clearing the backlog of such properties.
“We need to deal with the unprecedented number of loans in or still entering the foreclosure pipeline, the disposition of properties acquired through foreclosure, and the effect of a high percentage of distressed sales on home prices,” Duke said in a speech today in Washington. “We, as a nation, currently have a housing market that is so severely out of balance that it is hampering our economic recovery.”
Thsi is so stupid and I am really busy and don’t have time to comment at length, but turning residential neighborhoods into government operated rental slums is dumb. We’d be better off bulldozing them. We’d be even better off making the banks refinance them with the actual owners. The Obama Adminsitration is totally bereft of ideas. They are amatuers shooting blanks.
For properties that have gone thru the foreclosure process and are currently owned by banks, I’d be in favor of lease-purchase arrangements, to give the banks some income, prevent vandalism or squatters, and give those who could buy, but are hesitant to do so until they see prices stabilize, some way to tiptoe into the market. Houses sitting empty are not good for anyone, especially those neighbors who find themselves in the only occupied house on the block.
We’ve seen this happen in our town, Marie, and entire neighborhoods have suffered as a result. It’s better to have a home occupied by families, and if it takes a lease-purchase arrangement to do that, then by all means, do it. Lawns overgrown with weeds and trash only drag an entire neighborhood down……and it only takes one or two to do that. And an unoccupied home means one less property owner paying property tax, which decreases the tax base for the entire community, with predictable results.
Cennydd13,
Weeds and trash are bad enough, but some unoccupied, boarded up, foreclosed homes have been broken into and appliances, AC units and copper stolen. Others have become drug houses. All these present a real physical threat to those neighbors who remain in their homes.
The Government taking ownership of properties (albeit through foreclosure) and then renting the properties – probably back to the former owners- sounds eerily like serfdom. There’s got to be a better way.
OK, then what do you suggest?
cennydd–What I said before–either bulldoze them, sell them at fair market value or let the actual owners re-finance them at acceptable terms. BTW, if the Feds are correct, all the major banks KNEW the mortgages were over valued and they actually committed fraud in trading bundled mortgages at inflated values. (I’ve always been certain of that). The banks ought to have to take the losses they created not the US taxpayer. If that means somebody goes bankrupt, so be it. That should have been allowed to happen in 2008, because sooner or later the piper will have to be paid–sooner would have been better.
David Keller, I agree with you , with one addition–eliminate Fannie Mae and Freddie Mac since they in many cases put pressure on the banks to give the bad loans.