Government Set to Sell Foreclosures in Bulk

[greiner3]

71. "the government forecloses the house"

The government has NOTHING to do with the foreclosure process. The agencies only guaranteed the loans they backed originally in that if the homeowner did default it would pay off the loan to the holder of the mortgage which in many cases are the big banks. Fannie Mae and Freddie Mac then get the houses which they guaranteed for pennies on the dollar from the banks. They are then on the line for the millions of homes that were lost by homeowners by default. These agencies then turn around and sell the properties either at auction or to mostly the same banks they just paid off for full price for distressed rates. The banks then turn around and put these properties back on the market, usually getting thousands more than what they paid to get them back. The properties are usually sold 'as is.' This way all the money the bank gets in the difference is profit.

I for one disagree with most of the comments on this post. It was not HUD that created the housing bubble; it was the banks through the criminal actions of the lending institutions. Call it a conspiracy theory but someone had anticipated the housing bubble and made trillions in profit. It is they who will buy these houses.

In my neighborhood there is a 98% live in rate. I am in a newer subdivision within the city limits of Columbus OH. Columbus has a much lower live in rate. I would think that even if these predatory banks and outside investors do buy the unlived in houses for cheap and rent them [out it would benefit everyone involved. People need housing. Homeowners do not need empty houses all around them. This action would then free up a large part of the after market of the millions of empty houses depressing sales prices and then raise the land values. This would also boost the new housing market just by the lessening of empty after market houses.

I do not defend the few people who will make the huge amounts of money this action will allow. I do defend the actions that the government is taking to get the distressed neighborhoods full of empty houses back to having people in them.

Follow the money. Republicans so far are against this move. They know this action will help the economy and quickly.