PLEASE READ THIS ARTICLE... makes one think of what is really happening with this bill when you take into consideration all the movement of large bank related corporations to buy up the "SHADOW INVENTORY" that the banks have been sitting on all this time. Default Redsources' REO Management branch has signed a deal with Georgia based United Bank, HomeLand Security Capital Corp, moved into a space by aquiring Default servicing LLC, Another lender, Stewart Lender services aquired PMH Financial which manages about $2.5 billion in properties, and First American Financial Corp. is finalizing deveolpment of a REO asset managment firm. These are large billion dollar companies making these moves within the last month or two.
Seems like a smart thing to do ....to control the housing so they can rent it all out. Is this what the banks have been looking to do by garnering control of the real estate industry? Eviction is easier than foreclosure and less costly. This would be a lifetime mortgage payment with control over the total asset all the time. No longer will home ownership be a possibility unless you can afford the 20-30% down which they are also pushing for.
Maybe I am just being paranoid...you make up your own mind...everyone scoffed when I said oil would go up to $70 a barrell back in 1999.
Homeownership Rates Are Lower Than You Think
August 2, 2011
Guest Contributor, Sean O’Toole. CEO ForeclosureRadar.com
This morning a headline in my inbox caught my eye: Homeownership Rate Drops to 13 Year Low. Seems the Census Bureau has tallied the homeownership rate to be 65.9 percent, down from nearly 70 percent at the peak of the bubble. Despite the drop, I believe this stat significantly over-estimates the real rate of homeownership today. With another 9.6 percent of homeowners with a mortgage currently not making their payments, I’d argue that its time to realize the real rate of homeownership is getting close to being in the high 50′s – which is closer to a 50 year low. Sure the policies of extend and pretend will keep the Census Bureau from reporting this reality for months or even years to come, but we all need to be thinking about the implications now.
For example, should the government and banks really be in the rental business? House representative Gary Miller (R-CA), introduced a bill with bipartisan support to authorize FDIC insured banks as well as Fannie and Freddie into entering 5 year lease agreements on REO properties rather than sell them. He says “Something must be done to reduce the inventory of available homes and stop the further decline in home prices,” so he obviously hasn’t spoken with Realtors or investors in the area he represents or he’d realize that inventories throughout California are low and that homebuyers and investors are having a hard time finding decent properties to buy. Plus unlike banks, investors fix properties up by hiring local contractors, use local property managers, and spend their income locally, all of which create much needed jobs. His bill, if it passes, is likely to hurt the CA economy more than it will help… at least in the near term.
Rather than massive government intervention, like Miller’s bill, I believe the better answer is to deal with the decline in homeownership by re-igniting real estate investing. In an environment of zero interest rate policy ,with baby boomers nearing retirement, this change in homeownership rate may provide just the opportunity boomers need to get decent returns on their retirement savings. The only problem with this vision is that it’s bad for banks and Wall St who can’t afford to have investors move assets out from under their management. As such, expect more policies that help banks and GSE’s keep homes off the market, further frustrating both homebuyers and investors.