The Obama administration is being prompted by a pipeline to execute its plan to sell off the foreclosed properties to the investors who will lease them out. Most probably, the investors will do so to sort out the problem of thousands of empty homes that are bringing down the value of home. The buyers may ask mortgage questions to the lenders while buying the foreclosed homes. As per CNBNC, the management is about to declare the pilot program that is being carried out with the government-owned mortgage companies such as Freddie Mac and Fannie Mae.
With an approximation of 250,000 foreclosed properties that are seized by Freddie Mac, Fannie Mae, and the Federal Housing Administration, they setback in developing a backlog that is stopping the agencies from obtaining their homes in the market. More worse is that there are more probable foreclosures waiting. Lender Processing Services reports about nearly 2 million properties that have been found delinquent.
The necessary specifications about the government’s plan to support the private investors to purchase the foreclosed properties are still worked out. They consist of how the public-private business will function, the price and what knowledge is required to deal with the large-scale property ownership. The earlier efforts at attracting private investors like hedge funds to purchase homes in bulk have not appeared to be profitable to the private sector. This is the main barrier in proceeding forward with a plan. The private venture will invest when the numbers will add up to a good agreement. This means that they can give proper explanation for the price of handling various homes that are scattered in diverse places. This may seem to be quite different than managing one house with several lodgings.
The main objective of the program is to manage the demand and supply. By changing the foreclosed properties into rental ones, the supply of for-sale homes will reduce and the officials hope that it will bring an encouragement in the housing market.
The federal government is about to start selling off the government-owned foreclosed properties in bulk to the investors as rentals soon. According to CNN, this will be a new attempt to dispose of its developing portfolio of the distressed properties.