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Subscribe to RSSThe Obama administration, in conjunction with federal regulators and led by the overseer of Fannie Mae and Freddie Mac, are very close to announcing a pilot program to sell government-owned foreclosures in bulk to investors as rentals, according to administration officials.
There are currently about a quarter of a million foreclosed properties on the books of Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) and millions more are coming.
The foreclosure processing delays of last year created a mammoth backlog of properties yet to be processed, which are just now being re-started. One of the initiatives of this program is for the federal government to be in the position to mitigate and manage any new wave of foreclosures, sources say. Late stage delinquencies still in the pipeline number close to two million, according to a new report from Lender Processing Services. Foreclosure starts outnumber foreclosure sales by two to one, and, "the trend toward fewer loans becoming delinquent, which dominated 2010 and the first quarter of 2011, appears to have halted," according to LPS.
Story: As home prices fall, more borrowers walk away
Knowing this all too well, the Treasury Department, Federal Reserve, HUD, FDIC, Fannie Mae and Freddie Mac, with their conservator, the Federal Housing Finance Agency (FHFA) at the helm, are engaged in a collaborative effort to face this new wave of foreclosures head on and figure out a way to keep these properties from sitting heavily on the books of the government and sitting empty in the nation's neighborhoods.
As the Federal Reserve alluded to in its white paper on housing last week, "a government-facilitated REO-to-rental program has the potential to help the housing market and improve loss recoveries on reo portfolios." REO's (Real Estate Owned) are bank-owned properties, or, in this case, properties owned by the GSE's and the FHA. Three Fed governors pushed for similar plans in speeches last week as well.
A pilot sales program will be starting in the very near future, according to administration officials. They are working on what the market potential is, what pricing would be, how government can partner with private investors, and who has the operational experience to manage so many properties.
"I think there is a fair amount of money in the wings waiting to buy, investors doing cash raises to buy properties on a large scale," says Laurie Goodman of Amherst Securities. "But that means they have to build out a rental organization; it means they build out a management company because if you're accumulating a hundred homes in Dallas that's very different than running a multi-family building."
A number of institutional investors have shown appetite and interest in bulk REO deals, according to officials, but the plan has to incorporate ways to help facilitate financing. That has been one of the biggest roadblocks to deals already in the works between hedge funds and the major banks. Sources close to these private bank negotiations say there is plenty of cash to buy properties, but building out a management structure for the rentals is pricey, and some investors are finding the math doesn't add up to make it worth their while.
Larger investors want to be able to get real scale in any government program, in the range of 50, 100, 500 properties per deal, or one billion plus in assets, say officials close to the plan. That's why the government is looking to test a combination of different approaches. Fannie Mae did a fifty million dollar sale last June, but that was on the small side. Officials are evaluating at what larger asset sales beyond that would look like.
“We expect several pilots that will involve both local investors and institutional investors. The goal here is to reduce supply by converting foreclosed homes into rental units,” says Jaret Seiberg of Guggenheim Securities. “Less supply – even less fear about a flood of foreclosed homes hitting the market – could stabilize [home] prices.”
While much of this program will focus on local areas of distress, largely in the sand states, officials say they are looking at where the assets are today but are really more focused on where all the foreclosures will be in the future. It's not about the stock of foreclosures currently, it's about the flow of them over time and alternative ways to manage that flow.
Officials say they want to bring back private capital and help support rental opportunities for households, particularly when rent rates are up at the same time home prices are down.
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This way Nobama can suck up to the jew. Good to have a jew landlord in the neighborhood
This is becoming a no-win situation.
To stop this runaway process there needs to be an immediate halt on all foreclosures for at least one year.
We have to give the housing market some time to catch up.
The frauds in the banks and wall street are what threw so many people out of work. We need to give people some time to find new work so they can start paying their mortgages again. To just throw them out only decimates the housing market further and makes things worse.
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I'm guessing we should see you in about a month after that post.
William, we've all met a lot of really vicious, violent Jew biaters around here...but you take the KKK cake, by dragging into your anti-semitic slop out of nowhere.
This entire housing crisis seemed as if it were planned just like 911 was planned to initiate this NEW
WORLD ORDER!!!!
There is no escape is there?
Each President plays their role to uphold the ultimate agenda.
If you have been paying attention over the last 11 years or so all of the evidence is in your face and getting bolder and bolder as the years go on.
Big Brother is here just like we warned in the early 90's.
So is the NEW WORLD ORDER.
IT IS NEAR COMPLETION!!!
SO IS SOMETHING ELSE.
The FACT IS "WE REJECT THEIR DEPOSITS"!!!!!
Ahhhhhhhhhh, the sweet smell of SLUM LANDLORD's...what has this country come too?
I have something u can suck up to
Sell them to the bastards (mortgage bankers and brokers ) who put a lot of these people in the repo situation ? We bailed them out ...now let them buy the troubled real estate with the proceeds of our money at pennies on the dollar . What a concept.We stole their homes now lets rent them back to them . Lets move some of the people back into their homes and give them a chance to live the American dream instead of lining the wealthy pockets.
How can these be "their homes" when THEY did not pay for them????
If you walk by a car dealership and pick out an expensive car you cannot possibly afford,,,,,,,,,,,,,,,,,,,,,,does it become YOUR car???
paidmyfee - by that logic, if corporations are people then people are corporations and should also be allowed the same benefits of a corporation. Right?
I agree with citizen x. This appears to be the completion of the full circle for those who caused the problems to happen in the first place being able to turn around and make boat loads of money from the people they gave sub-prime loans to as prime who they knew wouldn't be able to pay off those loans. This is a bad idea. Make the rich more rich with opportunities that wouldn't be there if the idiots who created the mess to begin with hadn't been allowed to because of all the rules and regulations that used to keep them in check having been removed.
paid,
we paid them in the bailout. That money was supposed to be used to ease their customers mortgage issues but instead the pissed it away to their CEO's. This is their own fault and they should be punished for misusing public money given to private sector companies.
We, the public, should basically now own the banks. The only reason they survived was because of that huge flush of tax payer money. If people knew this is how it would have turned out I am sure there would have been many more protests against the bail out and just letting the true leeches of society fail like the Free Market dictates.
the banks repaid most of the money that they were loaned ( not given) for the bailouts. But hey.. lets ignore the fact that the banks honored their loan agreement and completely focus on the fact that people who cant or arent honoring theirs should be given their home because after all .. they deserve it just because they want it.
seriously folks, the banks repaid most of their loans, the banks did not force these people to buy homes and the banks are not responsible for making people work. stop with the gimme gimme gimme because it comes from somewhere and if the banks cant at least make back what they invested in the purchase of the home we will be bailing them out again and this time they might not be able to pay it back.
Seems some people don't have a clue as to why they should do it, so lets see, cuts down the on homes that are in bad condition dragging home value in that area down, cuts the surplus on home for sale which drives up the home value, should I go on, kick starts the construction industry and so on .... People get a clue or grow a brain ............
Your argument is based on spin and ignores the facts; The banks paid back the TARP money with interest years ago. The public actually does own the banks as their stock is traded on public stock exchanges.
I am a small time residential landlord. Scattered site rentals are a time consuming, detail oriented business. There are numerous safety, regulatory and financial aspects to renting single family houses. ( Lead based paint, home inspections, collecting rent on time, utilities, repairs, etc.) This plan sounds great in theory, but extremely difficult to execute on a large scale. Banks have been offering "Bulk REOs" for several years now. Most of it is over priced junk. It gets sold to a large investor who ignores the property and then tries to dump the houses on small investors.
A better plan would be to sell the property to investors, mom and pops and neighbors that will personally be responsible for the property and the new renters. HUD now gives owner occupants a priority over investors. Perhaps the new program will give priority ( and better pricing) to landlords that agree to be responsible for the property for a number of years. Bulk REOS to institutional investors is a bad idea and just perpetuates the problem with dangerous vacant houses.
I say sell them to qualified applicants and give them the sweetheart interest deal that they gave the banks. You know, 1/2% interest rates.
Agreed. There are lots of qualified applicants. There is NO REASON to sell these to investors as rentals. That's complete BS.
Yes the banks did pay back Tarp............however they still can borrow money from the fed at less then a percent. If you can even qualify for a loan what will you pay them? 5-6%? Pretty sweet deal if you ask me.
Most of this 'borrowed' money however is not used for loans that may help spur the economy, instead it is used to buy treasurys thus ensuring a free money flow for the banks. Sweeeeeeeeeet!
The investment banks who caused this mess with their exotic products continue the same behavior secure in the knowledge that if push comes to shove the Congress will bail them out. Can it get any sweeter?
Why yes because if they would like they can use this basically free money supply to buy up properties at the discounted price they created.
Really you gotta love it.........
I want to buy a home but....I am jumping through hoops with mounds of paperwork! Banks that won't answer back on offers for 3 mos. It's a joke. First they say you need X credit score...ok I'm good. Then they (USDA, FHA ect.) comes back 6mos later and raises the bar 20 points. Ok I'm good there to0 now. But the rest of the hoops are getting down right stupid.
I've talked to buyers that are ask to show paperwork from a home sale that took place over 20 years ago! Its crazy the stuff they are asking of buyers right now. I understand the need for caution but they have gone overboard the other direction. They have a backlog and there are buyers waiting but many have walked away from short sales for the exact reasons I've stated. Ask any real estate person how many sales they have lost due to slow moving banks, loans that blew up when a buyer couldn't produce a 20 year old paper and so on.
This is absolutely amazing to me!!! People complaining about losing their homes, they couldn't afford them anyway............ Who put them in those homes people??? Fannie Mae and Freddie Mack. It was a scam of the worst kind in the first place! No where in our Constitution does it say "We the American People owe you a home" No where in the Constitution does it say "We owe you healthcare" Life, Liberty and the Pursuit of Happiness, to most people would mean, you have the right to go out and work hard to amass your own stuff. Do what was done in the last housing crisis, you periodically drop the prices on the homes and then some person that has saved a 20% down payment buys the home. Hey, even give them a good interest rate. Sell them to individual investors but not to the same people that created the crisis.
Sell them at low interest rates to people who will live in them and forget making the already rich richer. As somebody else already pointed out, these "investors" they are talking about are those with access to direct loans from the Federal Reserve. Why not loan the money directly to people instead of going through the banks this time!
I like your idea Dave.
Why not have frannie and freddy refinance the nation, one time deal for new and refi's @2%.
Haven't the banks leeched enough?
I strongly agree. BOA sells to Fanny at full cost, and buys them back to rent. The taxpayer takes the hit, as did the former home owner. You thnk no smoking, no pets is bad, wait for no fat, no jobless need apply.
What a wonderful idea in order to keep with the slavery circle. First, take the homes from the people. Then, charge them an unending rent to move back into them again.
Anybody who has been in the house rental business knows this won't work because of the cost of maintenance, damage, insurance, taxes and turn over. After this program starts up the banks and investors will be at the government's front door asking for money to keep the successful program going. How could politicians refuse and put the originally evicted on the street evicted again? So there goes the tax dollar out to the banks and corporations again making them all richer and the middle and lower class just watch and ask why is all of this happening and why can't they share somehow in this tax dollar give a-way.
My daughter and son inlaw have been jumping thru hoops for 2 months now trying to get in a house. They both have good jobs and credit and money in the bank and were supposedly approved a couple of months ago. Then its somthing else, and oh yea something else, then oh yea something else. They won't worry me about the details. But I know its the bull with the banks. Its my grandson I worry about. All this has him so confused, he don't know if he has a new home or not. Meanwhile our other daughter just moved into her new home and we went to visit for Christmas and found out she has got to lease it for 2 years before she can become the owner. She has a great job as a CPA and has been there for years I just don't understand the coldness of these banks. I just know I'm sick of it. I know i hate bank of america and have since 10 years ago when i went to get a check cashed I had worked for and they charged me 5 dollars to cash it. 'm just surprised it took so long for America to figure them out. But I'm looking forward to the day bank of america is NO MORE.
This is not going to work at all. Can you imagine what will happen to all those homes rented out to those that can't afford a pot to piss in? And what will become of the neighborhoods???
Yeah, Dumbama sure would love to ruin everything we worked for by "integrating" the........(fill it in yourself). Careful folks, this is a major trap!!! Ghetto city on the horizon.
If you thought rents were ridiculously priced before, Just You Wait.
Now from the people who gambled away the U.S. Economy!! You can now rent the house you were buying before you lost your job. At a mere 20% more than you were paying before and with no end in rental payments in sight ever because the job you were lucky enough to find pays only half as much.
The citizens of this country are getting screwed over from every angle and it needs to end.
I'm so damned tired of people commenting about the erroneous idea that people who lose their homes could not afford them in the first place and that they should have never been approved for the loan.
When I purchased my home I could well afford it. I was making almost six figures a year and had more than enough money after my financial obligations to afford plenty of luxuries. Then, one day, I walked into my office and my position was terminated due to "economic factors".
Did I see it coming? No. Was I shocked and concerned about my future? Yes.
That very day I called my mortgage company and explained my situation. They told me to call back when I was in default by six months. When I was two months behind I called and attempted to make one month's payment but was told they would reject it because I was now two months behind. At that point I was never able to catch up on my payments. If I had two month's worth of payments I was three months behind, if I had three months worth of payments I was four months behind. If I attempted to ignore them and send in a payment they would return the payment to my bank account.
Finally, after not being able to make a payment for six months, my mortgage company agreed to work with me and they lowered my monthly payment by a whopping $200 per month (still well above what I could manage).
I'll never forget the last day I was able to walk through my house and revisit the memories of the times my family experienced there. I visited my son's bedroom and remembered tucking him into his bed and reading him a book. I visited the kitchen where many a family meal had been made. I visited the back yard and remembered catching fireflies with my son and playing catch with our dog. And then I placed the keys to my home into the hands of a man who was just doing his job.
Less than three months after the foreclosure the bank sold my home to a buyer for $70,000 less than what I paid for it five years earlier. Had they offered me that price I could have afforded to stay in my home and my family would not have experienced the difficulties of starting over again.
I have worked since I was 15 years old and even worked full-time when I was in college. Until 2008 I had never been released from a position with a company. I worked whenever they asked - weekends and nights. And, again, I was very comfortable in my position and knew I would be able to make all of my financial obligations with no problem.
To all of you who think those who lose their home simply could not afford it in the first place I say "shame on you". Just because you have not experienced the horror of losing your livelihood gives you no right to judge everyone who has been through this experience. While I am well-aware there are some people who spread their finances too thin, not everyone fits this mold.
I'll end with a special call-out to you "the old elf" who believes people created the crisis. You have no idea what you are talking about. There are plenty of citizens of this great nation who are hard-working and know how to manage their finances and still have found themselves to be in a difficult financial situation. Just because you are still employed or, perhaps, are living off the taxes of those of us who are still working 9-to-5 does not give you the right to be judgmental. Grow up and think outside of your box. Your discriminatory attitude makes you appear uncaring, callous and ignorant. If you are seeking employment I am certain the mortgage companies would embrace an employee such as yourself.
If it's true that you lost your house because you were continually short one month's mortgage payment, your mistake was not having an emergency fund set aside.
Government loosens restrictions so the down trodden can own a home...end result, wall street owns houses and become landlords to the poor hahahaha. Oh how I love the ideas of big government!!!!
No wonder Frank tuck tailed and ran!
Yes, a large number of foreclosures can bring property values down within a neighborhood. In our particular area, a bunch of rental properties can and does bring down property values as well. The investors will have to spend boatloads of money just to bring many of these foreclosures up to living standards and then when the tenants move out, they will probably have to spend it again! Many people who cannot afford to buy become tenants and in most instances, the tenants do not take care of the property, not inside and not outside either.
With so many people unable to sell their homes in the current market, many homes have become rentals. You can ride through a neighborhood and just about pick out the homes that are rentals... yards not mowed, parking on the lawn, broken down cars, painting neglected, etc., etc. If you get enough of those in your neighborhood, that ALSO brings down property values as the neighborhood becomes "less than desirable." I personally do NOT want to see all these foreclosures become rental properties. Sell them at bargain prices and allow someone else to move in there and fix the places up and enjoy "home ownership."
I’d wager that about 50% of these houses are not worth saving and should be demolished and the lots recycled as a neighborhood beautification project thus raising the value of the remaining homes. Oh by the way, at the expense of the institutions holding the deeds.
Old Elf -
And it would also mean the government leaves you the hell alone in the process. But that's not the case, is it? Many entrepreneurs can't reach the small business stage because they can't deal with the regulations and taxes while building and running a business and trying to get over the new business survival hump.
I have a disabled friend who is capable of earning a living working at home, but he can't because taxes take too much of his earnings. The government is forcing him to take disability even though he doesn't want to, simply because he can't afford to pay the outrageous costs of self-employment.
You can't have it both ways. If you expect people to make it on their own, the government has to get out of their way and let them do it. If the government makes it impossible or unnecessarily painful, then the government needs to take care of the people they have imprisoned and enslaved.
I will give you an example of this, and you tell me if you think it's fair. I have... discovered, developed, whatever... a medicine that stops severe panic attacks in seconds. It's all natural, non-addictive, does not interact with any other medicines, has no risk and no side effects.
An estimated 7 million people in America suffer from panic disorder. Many are on addictive sedatives, or anti-depressants that make them want to commit murder-suicide. Many others suffer in silence, some unable to leave their home for years.
Do you think I'm sitting on the golden goose? Isn't this the American dream? Don't you think I should get rich? After all, I worked for years to develop this, and it's a god-send for people who suffer from this horrible condition.
Not going to happen. The expense and the paperwork and the requirements to bring this to market are overwhelming. People will have to keep taking medicine that isn't nearly as effective or safe, and I will not become one of those 20-year overnight successes.
Citizens are in a can't-win situation in which the government makes it impossible for them to live the American dream, yet punishes them for failing to do so.
The same people who couldnt pay the mortgage are the ones they want to rent these houses to, what makes anybody think they will actually pay the rent.
Some very good points up there about how difficult it is for people with jobs and decent credit to obtain mortgages. If you have not gone through the financing process in a couple of years, it has become an absolute nightmare for buyers and sellers. The housing situation will start to improve when decent people with decent credit and decent jobs can get financed. This needs attention far more than converting junk houses to rentals. If houses can start to move again, the market will take over. Despite what the media says, many people want to own but cannot due to the hassle of getting a mortgage.
I just started a petition to stop this. We have to do something!
http://signon.org/sign/sell-foreclosed-homes?source=c.fwd&r_by=1599863
Perfect,the king of the Idiots (obama) wants to be a slumlord.
Why is the bank the bastard in this problem?
Name one bank that forced people to buy homes for overinflated prices?
Name a bank that forced sellers to sell homes for over-inflated prices?
Tough to do isn't it????
You can of course name one senator who forced Fanny and Freddie to approve loans for people with poor credit and no ability to repay them,,,,,,,,,,,,,,,,,,,,,,,,,Chris Dodd democrat.
You can find one congressman who steadfastly refused to address these problems as they were pointed out, time and time again in the years leading up to the disaster,,,,,,,,,,,,,,,Barney Frank democrat.
Scumbags who have bad credit, won't pay rent either.
Another ploy by the marxist-in-chief to buy votes. He wants to make the government the landlord and turn the nation into a slum of entitlement parasites living in government owned homes. Since we have seen how well they treat the homes we buy for them now,,,,,,,,,,,,,,,,,,,we know how this is going to end.
and people wonder why his health care plan is not popular,some people don`t pay taxs,bills,mortgage payments or child support.now start a health care program dependent on this type paying up.
Citibank, Countrywide, Wells Fargo, Wachovia, need I go on? Not only did the banks make money readily available, therefore driving up the price of real estate, they then tanked the market (and the rest of the economy) with the shell game they played buying and selling the worthless paper the mortgages were written on. I actually had one mortgage turned down because I "wasn't "buying enough house to match my income." I guess the bank thought I was going to rent it out,not that I was being practical about what I could afford.
As for naming Senators and billls leading to this mess, look up Gramm - Bliley- Leach (all republicans), and George Bush's American Dream Act (the one that eliminated the need for down payments and equity in order to buy a home.) There is plenty of blame to go around.
All that said, I am not sure if there is a better solution, but turning even more wealth over to the top 1% right now sure hits a sore spot, but I guess at least Obama has found a plan the republicans should be able to support. Oh wait, they can't support it. They can't support anything Obama does. This ought to lead the republican membership to some long hard sitting on the john!
Dave you were actually making sense until you started making it partison. I hate to break this to you Bill Clinton was the one who signed the Gramm-Leach-Blily bill into law in 1999 and the final vote was 80-9 in the Seante and 362-57 so you cant claim that it was a partison Republican only effort when a Democrat President and Overwheling majorites of Democrats in the House and Senate voted to pass it and signed it inot law.
Also it was teh Community Reinvestment ACt of 1977, again signed into law by a Democrat Jimmy Carter that required finanical institutions to make a certain amount of "investment" in low income communities, etc.
You might want to mention that the ADDI which is actully a program to assist first time low income home buyers with money, up to $10,000 for a down payment, and to pay closing costs and was administered by HUD.
If anything the ADDI is just another example of Big Government Incopetence if they weren't making sure the benificiaries of this program werent financially capable and received good loans. Shouldn't HUD have been looking out for these people they were trying to help especialy since they were using our money?
You must be getting the ADDI confused with the DREAM act which is amnesty for Illigal imigrants.
People who have bad credit are scum bags? Really? What an @!$%#.
Paidmyfee truly is the king of IDIOTS. Go take your racist, Obama hating rant to Fox.
paidmyfee: I assume you were in the senate And congress both to know that Dodd and Frank are the reasons for the housing collapse. If that was the case, why didn't you speak up about it? I don't agree with the thought of selling foreclosed homes to investors but rather make it easier for those qualified to BUY the house and live the American nightmare. Better yet... Give the houses away to those who have held steady jobs for 5+ years. The government makes more in taxes over 30 years than they will in selling in bulk to investors. One last thing: I assume that you feel that someone with bad credit just doesn't give a damn and didn't pay their bills although they had the money. There are people in bad situations that could not afford their bills for just long enough that the house would be foreclosed. WAKE UP PEOPLE!!! THE COUNTRY IS BETTER IN EVERY WAY NOW THAN IT WAS WHEN WYLE E. COYOTE WAS IN OFFICE. I AM VOTING OBAMA IN 2012... ALL THE OTHER IDIOTS HAD 8 YEARS, AT LEAST GIVE THE EARS A CHANCE TO MAKE A DIFFERENCE!
what about private investors who want to buy 1 house to rent out? how is that fair to sell them all in bulk? that is not in the interests of consumers.
Well, we now know the reason that BofA bought Countrywide! They will make millions off this deal! It took BofA some time to "negoitate" the deal but they got what they wanted. So much for a "transparent" government, huh? This whole thing smells, stinks to high heaven. BofA takes back a house because they won't help the homeowner stay in it, writes off the loss in taxes as "part" of doing business, then sells off the "distressed" properties to a shell company that they are backing. Plus they got TARP monies (which they kept for themselves).
The "small" investor who wants to buy one house will have a snowball's chance in hell of getting a deal!. Read the article - they are bundling hundreds, if not thousands, of houses into one deal. They did one deal for $50 Million and it was a small one. What chance does the Mom and Pop investor have there? Don't fool yourself into thinking this is for the good of the country no matter what the spin the adminstration puts on it. Wait until the election. See where his monies come from. That will tell the tale.
To David Noah, you are correct tht I omitted the word downpayment from the act. Below is the speech George Bush made upon signing the act. Frankly, I believe the republican deregulation of the banks was the primary culprit in the financial crisis we experienced, but yes I agree (and the point I was trying to make, albeit a bit biased), the destruction of America has been a bipartisan effort. Paidmyfee pointed to a couple of measures from the democratic side that contributed as well, i sought to provide balance. Somehow, most posts only seem to point at one side. Anyway, the correct name was the American Dream Downpayment Act.
Thank you all. Thank you for coming. Thanks for the warm welcome. It's great to be back at the Department of Housing and Urban Development. This is not my first time here, nor will it be my last.
I am here today because we are taking action to bring many thousands of Americans closer to owning a home. Our Government is supporting homeownership because it is good for America; it is good for our families; it is good for our economy. One of the biggest hurdles to homeownership is getting money for a downpayment. This administration has recognized that, and so today I'm honored to be here to sign a law that will help many low-income buyers to overcome that hurdle and to achieve an important part of the American Dream.
I appreciate Alphonso Jackson agreeing to step up and become the Acting Secretary of the Housing and Urban Development. I look forward to his Senate confirmation, a hasty confirmation.
I also want to thank Mel Martinez for doing such a fine job as the Secretary of this important organization. Mel brought integrity and honor to the office. He did a fine job on behalf of all Americans. And we honor you, Mel.
I want to thank all the hard-working officers and employees of HUD. I appreciate your focus and your dedication, your willingness to work on behalf of a better America.
I thank very much Members of the Congress who have taken time to come and join us for this important bill signing. Senator Wayne Allard from Colorado is with us. Senator Allard, thank you for your work on the floor of the Senate. Chairman of the Financial Services Committee Mike Oxley is with us. Congressman, thank you for coming. Congressman Jim Leach from Iowa is with us today. Congressman, thank you for being here. Congresswoman Katherine Harris, who had a lot to do with this bill getting passed, is here with us. Katherine, thank you for coming. Delegate Madeleine Bordallo of Guam is with us today. I'm honored you are here. Thank you for coming, Madeleine. I appreciate you coming.
I too want to pay homage to a man I call Little Woody; that would be Rob Woodson. He worked hard in the development of this policy. I think it is safe to say that he was the—he developed the concept for this policy, a concept embraced by my administration. I'm appreciative that Michelle is here. I also want to thank Dad for coming, Bob Woodson, who is a social entrepreneur, a person who cares deeply about every American having the right and a chance to own a home. Thank the Wood-son family. God bless you all.
I want to thank the representatives of consumer and housing groups that worked hard on this piece of legislation. I want to thank leaders of the national community organizations that are with us, members of the real estate industry.
This administration will constantly strive to promote an ownership society in America. We want more people owning their own home. It is in our national interest that more people own their own home. After all, if you own your own home, you have a vital stake in the future of our country.
And this is a good time for the American homeowner. Today we received a report that showed that new home construction last month reached its highest level in nearly 20 years. The reason that is so is because there is renewed confidence in our economy. Low interest rates help. They have made owning a home more affordable for those who refinance and for those who buy a home for the first time. Rising home values have added more than $2 1/2 trillion to the assets of the American families since the start of 2001.
The rate of homeownership in America now stands at a record high of 68.4 percent. Yet there is room for improvement. The rate of homeownership amongst minorities is below 50 percent. And that's not right, and this country needs to do something about it. We need to close the minority homeownership gap in America so more citizens get the satisfaction and mobility that comes from owning your own home, from owning a piece of the future of America.
Last year I set a goal to add 5.5 million new minority homeowners in America by the end of the decade. That is an attainable goal; that is an essential goal. And we're making progress toward that goal. In the past 18 months, more than 1 million minority families have become homeowners. And there's more that we can do to achieve the goal.
The law I sign today will help us build on this progress in a very practical way. Many people are able to afford a monthly mortgage payment but are unable to make the downpayment, and so this legislation will authorize $200 million per year in downpayment assistance to at least 40,000 low-income families. These funds will help American families achieve their goals and, at the same time, strengthen our communities.
And there's more to do as well. We'll continue to pursue a broad agenda to help people own a home. There are three steps I want to describe to you right quickly about what we intend to do.
First, those who apply for mortgages should be made aware of all the costs and warned about predatory lenders who take advantage of inexperienced buyers. So we've doubled the funds for housing counseling services, including those run by faith-based and community groups. We understand that buying a home for the first time is complicated, and we want to simplify the process. We want to help people understand the pros and cons of buying a home. We want people to be fully aware of what it means to buy a home and what it takes. And we want people as best protected as possible from those shysters who would take advantage of first-time buyers.
Second, we need to make the homebuying process more affordable. Some of the biggest upfront costs in a home purchase are the closing costs. Sometimes they catch you by surprise. [Laughter] Many homebuyers do not have the time to shop around looking for a better deal on closing costs. You're kind of stuck with what you're presented with. And so they end up paying more than they should. So we've proposed new rules to make it easier for buyers to shop around and to compare prices on closing costs, so they can get the best deal and the best service possible.
And thirdly, we want to make buying a home simpler. Many first-time buyers look at the paperwork from a loan application and, frankly, get a little nervous about all the fine print. Those forms can be intimidating to the first-time homebuyer. They can be intimidating to the second-or third-time homebuyer too. [Laughter] So this administration has proposed new rules to simplify the forms homebuyers and homeowners fill out when they apply for a loan or close on a mortgage.
We understand that buying a home is a big step, and so these three recommendations we're making, these three changes in the rules, will make that step easier, will enable people to make the step to buying a home—they'll be able to do so with more confidence. These are practical ways that we are working to expand homeownership across the country.
The dream of homeownership should be attainable for every hard-working American. That's what we want. And this act of Congress I'm going to sign, the regulations that I hope are finalized soon will help thousands of families fulfill the dream.
And so now it is my honor, right here at this important Department, the Department responsible for encouraging home-ownership in America, to sign the American Dream Downpayment Act.
NOTE: The President spoke at 1:57 p.m. at the Department of Housing and Urban Development. In his remarks, he referred to the late Robert Woodson, Jr., former Chief of Staff, Department of Housing and Urban Development, and his widow, Michelle; and Robert Woodson, Sr., founder and president, National Center for Neighborhood Enterprise. S. 811, approved December 16, was assigned Public Law No. 108-186. The Office of the Press Secretary also released a Spanish language transcript of these remarks.
Citation: George W. Bush: "Remarks on Signing the American Dream Downpayment Act," December 16, 2003. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=64935.
Read more at the American Presidency Project: George W. Bush: Remarks on Signing the American Dream Downpayment Act http://www.presidency.ucsb.edu/ws/index.php?pid=64935#ixzz1j0YQr4jm
Personally, I believe every American born citizen should be GRANTED one single home and/or property in their lifetimes. Open back up the 'actual' homestead act.
Why on earth would you think that being born here entitles you to a free home??
The "dream of home ownership" requires actual work, physical labor or employment. There is no constitutional requirement for home ownership, health care or a lifetime of free cash and food.
If you feel someone "OWES" you a house, a doctor, a dinner or a paycheck you are a parasite, a leech or tick, sucking the blood from hard working Americans.
It of course explains why you voted for Obama and keep falling for his crap.
I regress. I meant American citizen should be granted American land to build a home upon. Having an actual house given to them for free was not my meaning. That should be built with labor, work, and planning. The land however, when the government owns way too much, should be available for citizen use.
As it stands, the government opens up land, first to the rich. Then the rich sell it off to others for even more money. And it often changes hands a few times before we are finally 'allowed' to bid on it. Only after the fat cat gets his share though.
We had this not long ago where I live. A federal park. The government needed some money. So the federal park got a little smaller. Sold off in a huge hunk. Eventually, it changed enough hands to fall into a contractor company that bought it and built a bunch of houses on it, then eventually, after a nice big profit had been made by many, it was finally sold off individually.
Let's turn all of America into rental slums and allow some hand picked investors to become rich along the way.
No need to hand-pick investors. There is no need for a new "program" (read new government bureaucracy) to dispose of the properties. There is already a mechanism in place to accomplish this. It's called an AUCTION. Sell the properties and most will be converted to rentals.
I don't know all the details but anything Obama and his sidekicks cook up is dangerous and injurious to the economy.
Nice talking point, Joyce! "If the Obama administration odes it, it must be wrong....um...even if I have no f&%king clue what it is."
Should have stopped while you were ahead.
Vote Republican in 2012.
Actually, this sounds more like something the Republicans would come up with... this will only help the wealthiest of Americans and the banks. Republicans should be on board with this one!
descrs
But its not, its something the Obama administration has come up with.
that's what most banks are doing at this moment.
I have been trying to buy a few homes for rentals, at present the system they are using doesn't work very well . They are still trying to sell homes to people who cannot afford them. I will complain to every official possible, if they only sell or give volume buyers a priority. In my opinion that would be wrong, the government expects each and every taxpayer to carry the burden of their mistakes, at least give the small investor, if qualified an equal opportunity. Big business should not get all the deals.
Chuck 2737 - People like you are who give me hope that this thing will get turned around. You are out trying to make a positive out of this situation and I applaud that. I think that what the Obama Administration is trying to do is also positive although it does not consider people in your situation. We need to get word out that the working middle class deserves an even chance in this program. If enough people speak-up with logic I am sure they will hear us. I personally get so sick of the far-right and far-left sarcasm which solves nothing.
Who's your congressional representive? Why not let your representive (start with the local office) assist you? A very small number of them have helped people in their district's but of course, not nearly enough. Why isn't the Repulican controlled House screaming about this? Maybe it because everyone (both sides of the aisle) while are still on Xmas vacation while the common herd is back at work. Plus they'll join a real estate group so that they can profit also.
Wow great idea and let's make sure the REPO securities are government (tax payer)backed so the wealthy investors are protected and feel comfortable enough to invest LMAO. Rip off the public "Part Two" as the investors package them, selling to our pention funds and small stocks. Will that make it easier for the undewater folks to walk, burn the banks and just rent now? Heaven forbid! When will AIG start insuring the new investments? Sign me up to bet against this now. Latest sceme from Bilderberg LOL
Well, I guess the 1 percent will now become slumlords to the rest of America.
Go visit city hall, records, you'll see that they alreay are.
If people wanted to live in a "Rental" community dont you think they would have bought a house surrounded by Rentals?
This is occuring because Freddie and Fannie have millions of homes on there books and no one is buying. Their Programs to renegotiate morguages and keep people in their homes has been a complete failure.
Now the banks that in part helped create the Housing bubble are now going to buy those houses back at what will sure to be less than market value.
Thanks alot. I'm already underwater and now my home value will drop even more for your inept effort to try and save Freddie and Fannie and I could end up with Neigbors that have no vested interest in maininting the home or neighborhood there in which could cause furthor deterioratin of the value of my Home.
"Walking Away" is starting to sound better and better. Why Buy a house when someon can rent a nice one without having to worry about paying property tax, Home owners insurance, HOA dues, maintanence and upkeep, taking care of teh yard, etc.
I'm just curious, how do you know that you are underwater on your house? Did you have an appraisel recently?
If my next door neigbor who is trying to sell her house says she has to short sell it because she owes $40,000 more than its worth.
When I'm driving home and I see a Bill board advertising new homes in my nehborhod for $60,000 dollars less than what that same model was sold for in 2007 what the hell do you think.
I'm going to pay an appraiser to point out the obvious? Heres your sign.
Like I said, I was just curious. I sold my house last month and I looked on Zillow.com to see what they say it was worth and it is about $50K less than I sold it for.
I apologize Evil I thought you were being faciciest or something. We dont see our home as an investment its our "home". We have no intention of selling or defaulting. We signed a Legal contract in good faith and at the time it was a really good deal. Were planning on retiring in it so we never really think about "How much its worth". Besides in 10-20 years it will be worth what we paid for it unless some dumb@!$%# continues to try and interfere with the market trying to correct itself.
The question now is how much will the taxpayers lose on this deal. Dont forget weve been propping up Fannie and Freddie with some $317 billion dollars or so in bailouts. When they start selling those houses at a loss its Our money they are forfitting.
http://cnsnews.com/news/article/true-cost-fannie-freddie-bailouts-317-billion-cbo-says
No problem. I just keep hearing so many people saying how they are underwater but I didn't know how they actually know. I would say that you are probably right based on the info from around your home. It sucks but if you don't need to sell then maybe it is not a big deal. Like you said, you have to have a roof over your head so just stay put.
I was in my last house for almost 15 years and even in this crappy market I managed to sell it in 30 days and I still made over $50k after closing costs and realtor comissions. Now I'm going to build our custom home that we have always wanted. Land was cheap, the builders are hungry and the interest rates are at record lows.
Yeah, I have the same problem. And I own a little crackerbox 1928 house! You'd think something like that couldn't drop much more in value, but after talking with a realtor who knows the area, I'm about 15k under what I paid for it. Speculators totally RUINED this housing market, and now they're the ones that will get to cash in on a bunch of cheap houses they can rent out for a mint, because rentals are so scarce these days. Last I heard, the SLC area was at 95% rented out. You can't find anything reasonable except in the slums. I hope and pray that we don't lose our home, because if we do, there is LITERALLY nowhere else to go.
As to the article, I am flabbergasted that it took them this long to do something like this. If they had developed something from the beginning, such as a rent-to-own program to give foreclosed homeowners a second chance, we wouldn't have had half the problems we have now. They wouldn't have been kicked out, neighborhoods wouldn't have failed, and the rest of us that have played the game honestly wouldn't be taking it in the shorts.
EvilBusinessOwner... don't pay any attention to Zillow value estimates. I'm a Realtor and buyers and sellers are constantly arguing with me about value because of Zillow estimates. I'm not sure how Zillow does their calculation but they are often very wrong. Sometimes they are right on the money but that is only if the comparable solds they used were "normal" sales. Other factors go into determining market value that Zillow is not aware of... Zillow is not privy to sales contracts and doesn't know if a home is a foreclosure, short sale, or a normal sale. If we have plenty of comparable sales in a subdivision and there is a foreclosure here and there, we don't use the foreclosures to determine value. Also, closing costs and who pays for them is often in the terms of the contract and an appraiser is aware of those when doing the appraisal.
But yes, unleashing a bunch of rental properties will do even more to hurt an already bad housing market. It might just be the proverbial nail in the coffin!
This appears to be a move to get the banks to put their foreclosures on the books. I know of 3 that were foreclosed on 2 years ago and Countrywide/BofA can't find them on their foreclosure listings. The manager says they haven't been put on the bank's books yet and doesn't know when the bank will recognize these properties.
Or can't find the original settlement papers.
Lucille, they probably bundeled.
Again this seems to me to be a situation where large investors will benefit at the expense of the little guy.
Large investment banks will be bailed out of the paper they are holding on properties at the taxpayers expense.
Large real estate corporations will get guarrantees and low interest loans from the tax payers.
Property bargains will be removed from the small investors and those who hope to own their own home.
Neighborhood values will continue to stagnate as high rental areas are less desirable neighborhoods.
Home ownership opportunities stimulates the housing products market. Rental does not do so much.
Government intervenes in the free market system and gives incentive where it is not deserved.
I thought these were fannie/freddie houses? Am I missing something? I'm pretty sure they own them...
Same reason they are suing Chicago for trying to implement the upkeep law, they would have to pay a fortune to Chicago if it goes into effect.
I find the level of ignorance on this comment section to be similar to the other ones that attract a lot of what appear to be conservative know-nothings. The foreclosure market is a major problem, and this is an effort to find a viable solution to a problem that at present has no solution.
What I find most hilarious and simultaneously deeply disturbing are the 'Obama is a socialist, nazi or marxist' style comments. What strikes me most clearly is how obviously ignorant these posters are as Obaman owns no state industry and most of what he gets blamed for he inherited. He did choose a poor time to pursue his Health Care initiative, by my personal experience makes it clear we have a whopper of a health care problem and that no Republican wants to offer a workable solution, especially if it benefits the Democrats in any way.
We have a political system that has devolved into a sports game where each team believes that anything that benefits the other team must be avoided at all costs even if America is destroyed in the process. The many wingnuts that I see posting ignorant comments are part of the problem irrespective of which side of the fence they sit on; the ONLY way out is to pool ideas and let the best survive irrespective of source. While the Dems show more willingness to do this, the Republicans are so adamantly opposed to it I often wonder if they are actually trying intentionally to destroy America. If foreign power threatened to do half of what the Republicans want to do we would consider it an act of war. However bad the dems may be, the repubs are so awful they get my full attention.
The article clearly states this is not so much about dealing with the current crop of homes on the Books there getting set up to deal with the Future onslaught.
If you know its coming, and you dont do a friggin thing about it, like IDK maybe try and prevent the "Foreclosures" in the first place, then its just one more sign we need new Leadership.
It's much simpler. The super rich own all Washington politicians, media and the Fed Reserve and have them on strings. The super rich hide behind their slaves and Lobbyists to call the shots. The government is trash and governing for the common good for all Americans is long gone, probably since JFK. I would assume, as in world history, a revolution will repair this and all the cork soakers will fall......everyone who has aspired to rule the world or dictate a great country eventually has failed and they will too.
Come now David, if the government had tried to prevent the flood in the first place, everyone would've been pissing and moaning about government interference in the free market.
Uhmmm.... didn't government policy build the dam in the first place? You know, help the poor, help your supper wealthy friends, take no chances on you investment, pass losses to tax payers, on and on????
I thought I had heard everything and seen every way the uber-rich can squeeze the working class but this takes the cake.
How about no government intervention so the prices can fall to 'market' levels and real people will be able to afford them instead of artificially inflating the prices to keep home and rental costs higher than they would be.
Unfortunately this will probably be loved by both parties since the repubs will make a fortune as renters and the dems will have setup another permanent underclass of voters dependent on them for their housing.
I never thought I would say this but I agree with Reagan - the only way to fix things is to starve the beast.
Get the feds out of everything not written in the constitution. Then the scum-sucking fraudsters AKA politicians won't be able to screw things up as much.
OMG this is a bad idea.
boston....I totally agree! Put the houses up for auction with a reasonable amount of time to allow people to get their hands on some money....then sell them at absolute auction say over a period of a year or two....none of this trying to manipulate the market garbage....let it find its own level....wherever it is. I know it sounds cruel to people who've already paid off their mortgages or are close to it, but the problem is so huge it needs a complete overhaul because this is the result of trying to achieve a desired result that wasn't realistic and nobody knows where reality is.
I like to think I'm not crazy, but having someone in a windowless office cubicle determining the value of millions of unsold houses doesn't seem to be working. All it's worked to do was keeping raising values on paper to the point where it just wasn't realistic to satisfy some economic goals for a stock holders meeting or a report to Congress to support some phony baloney position. I personally think that reality is a place that scares the be-jesus out of just about everyone that doesn't have much left to lose. The longer it is denied the harsher the effects will be.
The air force isn't in the constitution, so that's out.
The founders thought black people were 3/5 of a person, thought slavery was ok, and didn't allow women the right to vote - that's out.
I guess you also agree with a huge tax raise as well, since taxes under Reagan were much higher and he himself raised taxes several times.
Finally, I guess you want us to sell weapons to Iran, then cut and run when the US was attacked. Reagan sold weapons to Iran, whose surrogate Hezbollah killed a lot of Americans prompting Reagan to cut and run from Lebanon.
This is a HORRIBLE idea. Better to auction them off. Rental homes especially a large # of them can bring down the value of an area because it makes it less desirable... because people who are in rentals don't usually stay long term. Too transient. This is not going to help house prices recover, this is only going to make more people upside in their mortgages, people who may not have been otherwise.
I can't think of a more horrible idea. Just sell them for market value. As the economy stabilizes (and it will, free market societies always do).... people will buy them. I'd rather be surrounded by empty houses than rental houses.
What a ridiculous notion.
I also object to the fed govt even trying to increase the price of housing. Why should my own govt work against my interests as a non-homeowner by trying to reinflate the housing market? I'd feel slightly better if they would allow us peasants in on the action but frankly, it's better just to let housing find its floor and then we can rebuild, beginning with housing prices that reflect actual value.
You don't realize the value is already down?
Allison....down to what? And from what? It has to be at a place where people are comfortable with it. One sided deals very rarely ever work out. The government is trying its darnedest to keep these houses out of regular citizens hands. It should be obvious to everyone by now that the artificial pricing scheme was a total failure. People that saw their house as an investment deserve the results a return to fair market will bring....they should have sold when they could have made money. There shouldn't be any guarantees that they will make money on every deal. The people that bought houses to have a home most likely will not be crazy about things as long as the banks leave them alone or make adjustments to accommodate the new situation.People buy tvs and then they go on sale all the time. That's life.
you know it's pretty sad to say but this country is so F'd up with this F President we have, if he would have given the people of the united states he gave the F thieves at the banks we wouldnt be in the shape we are now, now they want to take the homes that they stole from the citisens of this country and rent them back to us, talk about a double F'ing from this worthless, balless President we have and all the thieving bankers in the united states, they need to take all these people including the politicians to the vet and euthinize them all.
You can thank Gorgie boy and Newt the non-lobbyist for this situation. They shepherded in the bailout.
@Raincheck
Are you forgetting Chris "entertainment" Dodd and Barney " man-boob" Frank? Are you forgetting Clinton?
Georgie threw up the red flags in what, 2004-2005 in front of congress and got nothing but laughs from man-boob.
This is just Obama selling out Americans for the rich again and another reason I HATE everyone who voted for him.
Oh Robert, Robert, I voted for Obama, so I suppose you hate me. Real Christian.
R Lewis I hate Christians more then Obama they are the real evil terrorist because GOD gave us free will and they want to steal that gift form GOD and have everyone do it there way and most of the time there way has nothing to do with the bible.
Wow. Fannie and Freddie own so much, or som many foreclosures? I thought they were innocent in this debacle?
Regardless, this is a bad idea. Put them on the market to people who can afford them and buy them, not to be rented out as Section 8 housing, which the article does not mention but we all know is the plan. This will cost the taxpayers huge sums of money in the future, better to take a loss now and get it over with.
I especially hate when it is an election year because the politicians, rather than agreeing on ideas and finding ways to fix the economy and the job outlook, are too busy slinging mud at each other. Get over yourselves and start helping!
I would like this program better if it came with an opportunity to buy after say three to five years and proof that you can save money every month in a savings account - something like that would greatly appeal to a lot of people I think. There may as well be people in the houses. Houses are harder to maintain though than apartments.
Rent to own. You bet, that would be a great program, and it would prevent a lot of neighborhoods from being turned into rental slums. The renters would take better care of a place if they knew it would eventually be theirs.
That's never gonna happen! There's no middleman to make huge fortunes off the deal!
All the rich Obama supporters who have received the bulk of the stimulus dollars, will now be using that same money to buy houses at a steep discount from the government. Some will be turned into government subsidized housing, continuing to drain taxpayer dollars, the rest will be sold for a huge profit on the open market.
I think you're right, but the Obama supporter part doesn't fit. It'll be the top part of the 1% that really gets the money from this deal.
A billion just play certainly prohibits most people. Blocks of 500 houses at a time? How many blocks will it take to dispose of all those millions of houses? Two thousand blocks for every million houses. I wouldn't be surprised if that number doesn't line up nicely with the number of ultra rich wanting this deal to happen.
Are you freaking kidding me, now we are going to allow the Government to buy up homes and choose who gets a home, and you people are going to stand by and think this is a good idea. This is nothing less then fascism, communism, socialism, and all you people are worried about if it's the Republicans or the Democrats fault. It will be your fault! More Government control, next they will control what you can sell, how much you can sell it for, or even control the rent. WAKE UP PEOPLE!!!!
Great, After holding on to them for many years the government....errrr banks will sell them for a profit. Haven't they got enough of a bail out??? I think so. I agree with you BostonBC, Let nature take its course and let prices fall and as they do people who can, will buy them up. I would like to know the actual number of homes that banks have been holding onto, not selling waiting to cash in on this program? I know here in San Diego banks have only been releasing homes to go to sale (auction) based on current inventory.
If you have property that you are renting now, you will soon have to compete against the federal government to see who can rent for the lowest price. Soon you will have to sell your property to the U.S. government because you will not be able to keep up. This is the beginning of a new scheme to rob the American people of their private property. Yet another nail in the coffin of the U.S. if implemented.
Obama's new Chief of Staff ;
Any question Where Obama is getting his Billion dollars for his re-election from? Oops I forgot only Republicans are in the pockets of big business, my bad.
http://en.wikipedia.org/wiki/Jacob_Lew
There is not much Obama or anybody can do. Social mood directs the markets, economy, politics and the culture. When pessimism as seen in these forums takes hold, markets decline first, and the economy suffers later.
www.tradingstocks.net/html/socionomics.html
Bear markets make it harder for incumbents to win. This is because unhappy people want change, they first sell stocks, lay off people and vote off the president. Obama will lose if the market goes down. Obama will win if the market goes up. The market is an early indicator.