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sigh...

That's why the Obama Administration is pushing a potential plant to auction off foreclosed properties in bulk to investors, specifically the quarter of a million properties currently on the books of Fannie Mae, Freddie Mac and the FHA. As demand for single family rental properties rises, so too do potential investor returns.

"There is a hope that we'll be able to do a pilot in the near future, perhaps by the end of 2011 or early 2012. However, there hasn't been any decision on timing yet," according to an administration source.

So . . . why can't we bid on these?  Maybe get some support for community housing programs?

Oh, right.  Because Obama has his priorities.  More houses for the 1%, on the taxpayer dime.

Poll

Do you plan to buy some bulk housing?

50%4 votes
12%1 votes
25%2 votes
12%1 votes

| 8 votes | Vote | Results

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Comment Preferences

  •  Tip Jar (2+ / 0-)
    Recommended by:
    alguien, judyms9

    The two things Teabaggers hate most are: being called racists; and black people.

    "It takes balls to execute an innocent man." -- anonymous GOP focus group member on Rick Perry

    by Punditus Maximus on Thu Oct 27, 2011 at 02:21:45 PM PDT

  •  This would be a good time for average folks, (0+ / 0-)

    perhaps families, to incorporate ($65 at Legalzoom), pool some resources and place some bids.  Use whatever property is obtained to leverage funding for another bidding, then sell off the houses at low rates before Romney comes to buy and destroy your corporation.  Form a new corporation.  It's like the witness protection program, see.

  •  What should Fannie, Freddie, and FHA (1+ / 0-)
    Recommended by:
    VClib

    do with the properties instead?  Let the price keep falling?  Nothing stops a retail purchaser from buying a house in foreclosure if he or she can get financing, and that's hard now that nobody wants to buy predatory loans that have been repackaged.  It's also possible that, depending on who would be bidding on the auction, you could just buy stock or REIT shares.

    If it's the case that the economy is still growing slowly, rental is not a bad option -- it puts a potential bottom on the housing market, and it avoids the Scylla and Charybdis of either (a) having households put down 20% (most of their money) for a fixed-rate loan to buy an asset dipping in value or (b) taking on an exotic mortgage with balloon payment resets or some such.  The downside of now not making loans that should never have been made when housing was on the ups is that housing keeps on the downs.  

    Any comments on the Resolution Trust Company analogy in the article?  For Obama does have his priorities.  

    "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

    by Loge on Thu Oct 27, 2011 at 03:26:13 PM PDT

    •  It's usually better to sell (1+ / 0-)
      Recommended by:
      Punditus Maximus

      one at a time to small investors and homebuyers.

      You'll get retail type prices and not wholesale type prices.

      An unemployed construction worker with an employed spouse can participate in the market if houses are sold one at a time.

      •  Would not affect the goal (0+ / 0-)

        of stability in house prices.  And for that person, renting might well be a better deal.  Relying solely on home equity to generate savings was clearly the suckers bet.

        "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

        by Loge on Thu Oct 27, 2011 at 05:00:37 PM PDT

        [ Parent ]

        •  That's a bad goal. (0+ / 0-)

          Houses are still overpriced, and Obama's people still don't get that, because they want their MBS's to perform, not for Americans to have access to adequate housing.

          The two things Teabaggers hate most are: being called racists; and black people.

          "It takes balls to execute an innocent man." -- anonymous GOP focus group member on Rick Perry

          by Punditus Maximus on Thu Oct 27, 2011 at 08:32:55 PM PDT

          [ Parent ]

          •  Thanks, Andrew Mellon! (0+ / 0-)

            liquidate, liquidate, liquidate -- of course if you rent a house, and it's adequate, you have access to adequate housing.   And the losers of such a policy aren't just holders of pass-thru certificates but anyone with home equity or people who aren't  so underwater they haven't walked away yet.  

            who "Obama's people" are in this example is anyone's guess.  The only people in the administration with serious personal wealth are Bill Daley, Hillary, and maybe Leon Panetta, but I suppose when you add in the book royalties Obama is as well -- the Presidential salary alone wouldn't put him in the top 1%.

            But of course, you've read all of their disclosure forms very carefully to see who owns what mortgage certificates because otherwise, it might look like you're motivated by personality.  

            "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

            by Loge on Thu Oct 27, 2011 at 10:18:13 PM PDT

            [ Parent ]

            •  If you have to lie to support your position, (0+ / 0-)

              why are you holding it?

              Housing prices have to come down and wages have to come up.  That has nothing to do with Mellon's desire to destroy every organization in the country.

              Housing is relatively overpriced in this country.  This is because, among other things, an explicit Obama goal is to prop up housing prices to above-trend levels.  Given his indifference to decreasing wages, it's cruel.

              The two things Teabaggers hate most are: being called racists; and black people.

              "It takes balls to execute an innocent man." -- anonymous GOP focus group member on Rick Perry

              by Punditus Maximus on Fri Oct 28, 2011 at 08:52:50 AM PDT

              [ Parent ]

              •  it's not a lie if i believe it. (0+ / 0-)

                and one can note as well you went straight ad hominem.  As far as wages go, which direction are they likely to move if savings keep evaporating?  We've already seen what happens to aggregate demand with people not using their houses as credit cards.  You are proposing to exacerbate that.

                Mellon's argument was that the government should respond to the great depression by letting stocks, real estate, what have you fall until they fell so low people started buying again.  I'm not backing away from the comparison.

                "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

                by Loge on Fri Oct 28, 2011 at 09:04:17 AM PDT

                [ Parent ]

                •  No I'm not remotely proposing to do that. (0+ / 0-)

                  You're fabricating my position, again.

                  This discussion is concluded.

                  The two things Teabaggers hate most are: being called racists; and black people.

                  "It takes balls to execute an innocent man." -- anonymous GOP focus group member on Rick Perry

                  by Punditus Maximus on Fri Oct 28, 2011 at 09:23:03 AM PDT

                  [ Parent ]

                  •  Not a fabrication (0+ / 0-)

                    Not to belabor the point, but you don't get to insult me and then declare the discussion finished.  if you don't want me to misinterpret your position, do a better job articulating it.  I assure you, I'm genuinely believe your argument is as i've characterized it, and if I'm mistaken, it's an honest mistake but one in which you share at least some of the responsibility.  If you're not going to explain the distinction why a reduction in house prices would be good for the economy now but bad for the economy in 1931, that's your prerogative.   The larger point is that drive-by accusations of dishonesty are pretty low class given that I explained both the analogy and the underlying argument in support of which I made it.  Which of course says nothing about the fabrication of Barack Obama's personal motives.  If you want to accuse the President of using the powers of office to enrich himself, get your ducks in a row first.  You doth protest too much, when you say disagreement is fabrication.  Either way, and I mean this in the nicest way possible, eat a hearty bowl of shit.

                    "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

                    by Loge on Fri Oct 28, 2011 at 10:38:20 AM PDT

                    [ Parent ]

          •  oh, i see you also rec'd (0+ / 0-)

            the comment advising Fannie and Freddie and the FHA to sell at "retail type prices," which, is an argument couched in terms of getting higher prices, at least for those loans sold piecemeal.  i suppose doing nothing would perhaps accomplish both goals -- house prices keep falling (as individuals can by any property they want as long as they get financing) AND when these entities do sell off properties, it's still retail.  Pennywise, pound foolish.  But we shouldn't advocate doing nothing, as that might make it seem that Obama's powerless.

             There is "support for community housing programs," yet the first page of links for that is all about subsidized rentals.  Increasing the supply of rental properties is also a rental subsidy.  So, in an important sense, Obama's doing exactly what you want him to do, while also creating jobs for whoever it is hires people to clean up abandoned properties to make them rentable.  Typically, very few groups advertise their ability to bring down property values, but I suppose some combination of drug gangs and porn retailer associations could team up to give it a shot.  Or cell phone companies.  Nobody wants to live near those cancerous relay towers, even if the signals are quite good.  

            "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

            by Loge on Thu Oct 27, 2011 at 10:32:27 PM PDT

            [ Parent ]

            •  Replace "houses" with "national parks" (0+ / 0-)

              and you've given Obama some good ideas for balancing the budget next turn, big guy.

              The two things Teabaggers hate most are: being called racists; and black people.

              "It takes balls to execute an innocent man." -- anonymous GOP focus group member on Rick Perry

              by Punditus Maximus on Fri Oct 28, 2011 at 08:53:37 AM PDT

              [ Parent ]

              •  If Obama's as evil as you think he is, (0+ / 0-)

                he'll already have thought of that one himself.  

                I happen to think national parks are filled with bugs and snakes so i'm not completely against selling them, but saying the government isn't letting house prices fall fast enough and losing too much money in the process is no different from saying the food is terrible and such small portions.

                "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

                by Loge on Fri Oct 28, 2011 at 09:15:39 AM PDT

                [ Parent ]

    •  At one time teachers could buy (0+ / 0-)

      federal housing agency held properties at half-price.

      I think they still can.

  •  Prices need to fall (1+ / 0-)
    Recommended by:
    Punditus Maximus

    The real estate market will never stabilize until people are no longer expecting prices to fall further, and especially not until there's an entry level that's reachable with the limited credit banks are willing to extend.  Everyone and their mother knows that housing prices are inflated, but some people want that because the value of other paper assets are tied to those inflated prices.

    Do you know why they call it the American Dream? Because it only happens when you're asleep.

    by Visceral on Thu Oct 27, 2011 at 09:01:14 PM PDT

    •  and so the 1% versus 99% meme fails (0+ / 0-)

      paper assets are the same as any other assets (except to goldbugs), but that aside, a lot of the people who want a rebound are people in the 99% of 47% or whatever the shit who have, or used to have, savings in the form of home equity.

      If investors are able to get credit to purchase houses and get an income stream from renting them out, it at least addresses the problem of properties being abandoned and creating vicious cycles where one property in disrepair hurts the values of neighboring ones.  You might find as well banks willing to finance purchases at lower prices to these institutional investor/landlords who would be better credit risks.  Prices would fall a little bit, but not head over heels, as individuals who did want their little piece of the American Dream would still be competing with the discounted present value of rental payments.  It's really a way to let the air out slowly, and perhaps get a few construction jobs to fix up houses to rent them out in the mix.  

      "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

      by Loge on Thu Oct 27, 2011 at 10:42:37 PM PDT

      [ Parent ]

      •  not at all (1+ / 0-)
        Recommended by:
        Punditus Maximus

        The 1% are the ones who want asset prices to stay inflated b/c that's a big chunk of their paper wealth.  People are losing their homes because banks are unwilling to recognize the declining value of the properties and modify the loans to reduce the principal because that would take a huge chunk out of their balance sheets.  Banks would rather let the houses rot than write down the principal, because then they can keep pretending they have money.  

        Romney's foreclosure plan is at best a way to make sure the banks can avoid losses by turning to renters to maintain a cash flow on the mortgages.

        Do you know why they call it the American Dream? Because it only happens when you're asleep.

        by Visceral on Fri Oct 28, 2011 at 09:51:16 AM PDT

        [ Parent ]

        •  Romney? (0+ / 0-)

          What about the 1% who made money shorting the housing market?  This continues to conceal more than reveal, not to mention that someone who wants to sell a house for whatever reason just in the ordinary course of life is also screwed if prices keep falling.  

          The second paragraph doesn't make a lot of sense -- if the properties are sold, there would have to be write-downs if the price is less.  

          I've always liked the idea of instead of foreclosures (bigger losses, people lose house), properties in default get converted to rentals.  People stay in house, there's at least some income going in, keeping banks more or less solvent.  This seems like an imperfect variant on that.

          "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

          by Loge on Fri Oct 28, 2011 at 10:45:32 AM PDT

          [ Parent ]

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