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U.S. government converts 1st foreclosure to rental

WASHINGTON — The U.S. government has started selling off its stock of homes in foreclosure.

The Federal Housing Finance Agency said Monday that a group of investors purchased the first of 2,500 homes being sold as part of a foreclosure-to-rental program.

The government has control over roughly 250,000 foreclosed homes owned by Fannie Mae, 1 percent of which will be sold and converted into rentals through the pilot program.

Officials say converting the homes into rentals can reduce credit losses and stabilize home values. Homes in foreclosure sell at a 20 percent discount on average, which can hurt surrounding home values.

Investors can submit applications to purchase properties owned by Fannie in some of the nation’s hardest hit metro areas — Atlanta, Chicago, Las Vegas, Phoenix and parts of Florida.

The government rescued Fannie and its sister organization Freddie Mac in September 2008 and has funded them since the financial crisis.

2 comments

  1. These foreclosures often fall into the category of victims of fraud who failed to get legal redress from the Justice Department. Had the mortgage fraud settlement been $400 billion as the damages show to be the true cost of the fraud rather than the $25 billion it was, these homeowners may have received the help they needed in a timely fashion. Now, the very banks and realtors committing the fraud are profiting from buying and selling them.

    Many of these people were those that worked hard to move into the middle-class over decades, fighting stagnant wages and cost of living to keep these homes, later to lose their jobs in this crisis. Many were fixed income seniors who thought a second mortgage would make repairs and would be paid in full over time. Many were first time homeowners placed into mortgages that were predatory and onerous.

    This crass dismissal of the crime and these victims in the statistics we read as ‘fixing the housing problem’ is just as demeaning to those writing the articles as to those victims whose lives were devestated by crime.

  2. Government created the regulation, banks followed it, people signed the dotted line. Where is the accountability. The fraud is the government and its regulations. I am still waiting for a mortgage broker to be charged for fraud. It will not happen, because no fraud happened. People who kept hocking their house to pay for cars, credit card bills, and dream vacations are the ones that spent the money, as usual the guilty find a way to be label a victim. Grow up and take responsibility for your actions.

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