Thread: Obama / Insiders Honcho Private-Govt Real Estate Sales

Obama and Insiders Honcho Private-Government Real Estate Sales
Kathy Fettke

Who’s the largest owner of REO (bank-owned) inventory in the country? The taxpayers! That’s right. You and me.

Mortgage giants Fannie Mae and Freddie Mac, along with the Federal Housing Administration (FHA), are currently holding approximately 250,000 foreclosed homes. That’s roughly half of all unsold, repossessed properties.

Plus, these government-backed agencies may soon be forced to repossess 830,000 more homes currently in some stage of foreclosure.

What’s a government to do with so many distressed properties? Unloading them into the market would only further depress values, while damaging the fragile U.S. economy that depends on real estate stability. Holding the homes vacant leaves them vulnerable to vandalism and disrepair.

Real estate investors have suggested a possible solution: rent them! Millions of former homeowners are now becoming renters and need housing. The cash flow on rental property is at all time highs so it could be a profitable business. Unfortunately, the American people won’t be the benefactors, but Wall Street might.

The greatest transfer of wealth from the public to the private sector is about to happen if Fannie and Freddie are allowed to sell off their massive portfolio of foreclosures to private investors on Wall Street. And that appears to be what’s happening.

The FHFA (regulator of Fannie and Freddie) has been accepting RFI’s (Requests for Information) from the public to garner ideas on what to do with all the government-owned foreclosed homes.

It sounds like the government genuinely cares about our opinion, but don’t get too excited just yet. In reality, unless you’ve got a billion bucks in your pocket and some insider handshakes, you don’t get to play this game.

Even if you submitted your RFI, corporations with billions of dollars will most likely win the opportunity to buy Fannie and Freddie’s inventory at rock bottom prices. After all, the RFI process was actually set up by them.

If they get their way, investors from the private-equity and hedge fund community, like Goldman Sachs and company, will instantly become the largest land owners and landlords in the country. They will get to buy US taxpayer-owned properties in bulk for pennies on the dollar.

They will likely be required to lease some of the properties, so at least the American people will get to rent them back - at market rates, of course.

If you don’t like the sound of this, it’s not too late to put up a fight. The FHFA is still reviewing the proposals and have not yet made a final decision. It seems the request for proposal was really just a way for members of Congress to see if they could get away with it, without too much backlash.

If properties are going to be released for pennies on the dollar, shouldn’t the free market be involved in that? And, if the properties were meant to be rented, shouldn’t experienced real estate professionals handle it instead of Wall Street? We already know what happens when those guys dabble in industries they don’t understand.

Kathy Fettke is CEO of www.RealWealthNetwork.com, an educational company dedicated to teaching Americans how to build wealth through real estate investments.

http://finance.townhall.com/columnists/ ... page/full/

This has been coming for a while. Additionally, HUD has the "Firstt Look" program for minority "grantees that include the old ACORN that get first a 10 day right of refusal on all properties before they go on the market with their clients getting government grants to buy the properties.