BREAKING NEWS FROM CNBC’S DIANA OLICK: GOVERNMENT PLANS TO SELL FORECLOSED PROPERTIES
Following is the unofficial transcript of breaking news from CNBC’s Diana Olick. All references must be sourced to CNBC.
Following is a link to Olick’s story on CNBC.com: http://www.cnbc.com/id/45925851.
Government Plans to Sell Foreclosed Properties
DIANA OLICK: CNBC HAS LEARNED THAT THE OBAMA ADMINISTRATION AND FEDERAL REGULATORS ARE CLOSE TO A PLAN TO SELL THE BILLIONS OF DOLLARS WORTH OF FORECLOSED PROPERTIES ON THE BOOKS OF FANNIE MAE, FREDDIE MAC AND THE FHA AND THE BILLIONS MORE THAT ARE COMING. THERE WILL BE A PILOT SALES PROGRAM STARTING IN THE VERY NEAR FUTURE, THAT ACCORDING TO ADMINISTRATION OFFICIALS. THEY WANT TO SELL THESE PROPERTIES IN BULK TO INVESTORS AS RENTALS. NOW THE GSEs AND THE FHA TOGETHER OWN JUST UNDER A QUARTER OF A MILLION FORECLOSED PROPERTIES, BUT THE FORECLOSURE DELAYS OF LAST YEAR CREATED A HUGE BACKLOG YET TO BE PROCESSED. ONE OF THE INITIATIVES OF THIS PROGRAM IS TO BE IN THE POSITION TO MITIGATE AND MANAGE ANY NEW WAVE OF FORECLOSURES THAT COULD DEVELOP SAY THOSE OFFICIALS. THIS INVOLVES THE TREASURY, THE FED, HUD, THE FDIC, FANNIE MAE, FREDDIE MAC WITH THEIR CONSERVATOR THE FEDERAL HOUSING FINANCE AGENCY THAT IS THE FHFA LEADING THE WAY. AS THE FED ALLUDED TO IN ITS WHITE PAPER LAST WEEK, A GOVERNMENT-FACILITATED REO-TO-RENTAL PROGRAM HAS THE POTENTIAL TO HELP THE HOUSING MARKET AND IMPROVE LOSS RECOVERIES ON REO PORTFOLIOS. REOs ARE BANK-OWNED PROPERTIES OR IN THIS CASE PROPERTIES OWNED BT THE GSEs AND THE FHA. NOW THE AGENCIES 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, SAY OFFICIALS. A NUMBER OF INSTITUTIONAL INVESTORS HAVE SHOWN APPETITE AND INTEREST THEY SAY. BUT THE PLAN HAS TO INCORPORATE WAYS TO FACILITATE FINANCING. OFFICIALS SAY THEY WANT TO BRING BACK PRIVATE CAPITAL AND HELP SUPPORT RENTAL OPPORTUNITIES FOR HOUSEHOLDS PARTICULARLY WHEN RENT RATES ARE UP, AS YOU SAID, AT THE SAME TIME THAT HOME PRICES ARE DOWN. WE HAVE A LOT MORE ON THIS MANY MORE DETAILS ONLINE.
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