Freedie Mac Foreclosed Homes

White House looks to shed foreclosed homes

WASHINGTON - The Obama administration, aiming to boost a housing market showing little sign of recovery from the 2008 credit crisis, is seeking ideas for renting, selling, or disposing of foreclosed homes controlled by the government.

The Federal Housing Finance Agency, regulator of Fannie Mae and Freddie Mac, US Treasury Department, and the Department of Housing and Urban Development announced the solicitation yesterday.

The agencies are seeking to shrink the pool of foreclosures and boost home prices by finding investors for properties owned by the Federal Housing Administration and US-run Fannie Mae and Freddie Mac.

Selling or renting properties in blocks “may reduce taxpayer losses and meet the enterprises’ responsibility to bring stability and liquidity to housing markets,’’ FHFA acting director Edward DeMarco said.

President Obama has struggled to right the housing market since he took office in January 2009, four months after losses stemming from defaults on subprime loans pushed Fannie Mae and Freddie Mac into government conservatorship.

Freddie Mac and rival Fannie Mae have survived on government aid since they were seized in September 2008. Since then they have drawn almost $170 billion in Treasury aid to remain solvent.

As he prepares to seek reelection next year, critics say Obama has little to show for his efforts. The administration’s Home Affordable Modification Program has helped about 650,000 borrowers keep their homes, far short of the 3 million to 4 million it had targeted.

“In the 2008 campaign they said the president would come in and fix the housing problem,’’ said Keith Hennessey, who was director of the National Economic Council under President George W. Bush. “We literally couldn’t see a way that policy could solve the problem. I think they’ve figured that out now.’’

With yesterday’s announcement, the focus shifts from keeping borrowers in their homes to finding a future for the houses whose owners couldn’t be helped.

XE.com - FACTBOX-White House considers ways to stem housing woes

Aug 26 (Reuters) - The Obama administration is looking at options for reviving the housing market, an Achilles heel for the struggling U.S. economic recovery.

While private-sector expectations have been building that the White House could roll out steps on housing as early as September, an administration official said there were 'no plans to announce any major new initiatives at this time.'

But the official added that the administration continues to 'look for ways to ease the burden on struggling homeowners and to help stabilize the market.'

Below are some policies the administration could turn to help the housing sector.

STEM GLUT OF FORECLOSURES

The backlog of unsold homes remains one of the biggest challenges for the administration in trying to boost a housing market still struggling to recover from its 2007 collapse.

Already, the Treasury Department has asked hedge funds, private-equity groups, and institutional investors for ideas on buying and converting foreclosed homes owned by Fannie Mae , Freddie Mac and the Federal Housing Administration into rental units. By removing foreclosed homes from the market, the government could help stabilize home prices.

The administration has already allocated $45.6 billion in taxpayer funds to help prevent foreclosures. About $1.2 billion of the money set aside for housing assistance has been spent, according to the Government Accountability Office.

Properties in some stage of the foreclosure process made up nearly one-third of all U.S. homes sold in the second quarter of 2011, according to real estate data firm RealtyTrac.

PRINCIPAL REDUCTIONS, REFINANCE OPTIONS

Several programs already exist to help homeowners refinance mortgages or avert foreclosure. These provide incentives for lenders to alter the terms of loans to make them more affordable.

Under one of the Obama administration's taxpayer-funded housing programs, states have chosen to allocate $1.52 billion to help write down principal.

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