Replies (11)
- wetdawgs
- Contributions:39568
It will be interesting to see how this rolls out. Are lenders going to have to set up whole new (expensive?) departments in order to manage rental properties and comply with all the rules/regs related to being property managers? It seems as if property management is something that lenders haven't done well and are outside their skill sets, although helping the consumer humans is definitely a worthy cause.
- Connie Klemme
- Contributions:3347
well what comes to my mind as a problem that this solves is the situation when there is already a renter in the REO and the REO company/bank has to evict them or let them stay (rare but have seen it happen) but keep it on the market.
So when the current renter that is a good renter who pays, they can stay. The bank/REO company can become the landlord, it's one less foreclosure on the market, one less family that either doesn't want to buy or can't buy that didn't get uprooted due to the fault of someone else, and agents aren't showing a house to buyers where it is occupied by a person that does NOT want it to sell.
I'm sure there is a bad side but at the moment...this seems like a refreshing change if it rolls out like that. I'll have to read whole thing and watch for what happens!
So when the current renter that is a good renter who pays, they can stay. The bank/REO company can become the landlord, it's one less foreclosure on the market, one less family that either doesn't want to buy or can't buy that didn't get uprooted due to the fault of someone else, and agents aren't showing a house to buyers where it is occupied by a person that does NOT want it to sell.
I'm sure there is a bad side but at the moment...this seems like a refreshing change if it rolls out like that. I'll have to read whole thing and watch for what happens!
- Dan, "the_country_hick"
- Contributions:4827
Sure, it makes sense. The government GSE's are now getting out of renting foreclosures but the banks can do it this time.
This may not last very long as the banks could get hit by some very expensive reapirs. Tenants can demand repairs be made at the banks expense. Mortgagees can make no such demands.
This program will only stop qualified buyers from buying a house that its present occupant could not afford to stay in. Why should buyers not have more houses to choose from to buy?
Throughout history those who agreed to pay for something and defaulted lost the ability to use that something. This is going the wrong direction. Once you lose you should pay the total consequences for your actions including foreclosure and eviction. Do not forget about moral hazard.
This may not last very long as the banks could get hit by some very expensive reapirs. Tenants can demand repairs be made at the banks expense. Mortgagees can make no such demands.
This program will only stop qualified buyers from buying a house that its present occupant could not afford to stay in. Why should buyers not have more houses to choose from to buy?
Throughout history those who agreed to pay for something and defaulted lost the ability to use that something. This is going the wrong direction. Once you lose you should pay the total consequences for your actions including foreclosure and eviction. Do not forget about moral hazard.
- hpvanc
- Contributions:3080
There will be a minority of banks that can make it work. I'm guessing that the big banks will make such of a disaster of it if they participate, that it will be a very expensive short lived program. Given the track record the large banks have amassed, I'm guessing that even good long term tenants won't renew their leases after the take over.
- Connie Klemme
- Contributions:3347
Dan I'm thinking of the renter that paid the rent but the owner didn't. So they are an innocent victim in that case- not a moral hazard that I can see.
but the expensive repairs is definitely an issue.
again...needs more thought.
I do agree with hpvanc- just thinking about what a disaster it was to get the lawn mowed on an REO listing last year. at one point..after weeks of warning there might be a citation, It happend, I scanned it...sent a detailed email to the asset manager- his reply was to thank me for my inquiry and refer me (the listing agent) to contact the listing agent about my concern.
in my excitment for the idea...I had forgotten about these kind of things.
still....need more thought on it.
but the expensive repairs is definitely an issue.
again...needs more thought.
I do agree with hpvanc- just thinking about what a disaster it was to get the lawn mowed on an REO listing last year. at one point..after weeks of warning there might be a citation, It happend, I scanned it...sent a detailed email to the asset manager- his reply was to thank me for my inquiry and refer me (the listing agent) to contact the listing agent about my concern.
in my excitment for the idea...I had forgotten about these kind of things.
still....need more thought on it.
- Dan, "the_country_hick"
- Contributions:4827
Connie, a renter who had the landlord foreclosed on is in a totally different category compared to a mortgagee who did not pay the mortgage. A renter just wanted to rent and has done so.
The mortgagee has not done what they needed to do to stay in the house. I do not think many of these would be rented back to actual renters who had a landlord before. I expect most who would rent under this would be those who did not pay the mortgage. That is the moral hazard part.
The mortgagee has not done what they needed to do to stay in the house. I do not think many of these would be rented back to actual renters who had a landlord before. I expect most who would rent under this would be those who did not pay the mortgage. That is the moral hazard part.
- Dunes ..
- Contributions:3686
Point to Ponder
This is just the official Press Release..it's not like the Big Boys did not know this was coming. So where's the rush to get prepared, form a plan, get the Program in Gear?
They start now it will get in Gear in any significant way when/where?
Same rush as the rush to do Loan Mods imo...
Why?..
"Your company earned a record $19.0 billion in 2011, up 9% from the record earnings of $17.4 billion in 2010. Our return on tangible equity for 2011 was 15% — the same as last year. Relative to our competitors and given the prevailing economic environment, this is a good result".
Jamie Dimon, CEO of JP Morgan Chase...Letter to Shareholders.
Mess started when?..Bailout..Robo Signing..Settlements..Foreclosure Moratoriums..
Sounds to me like they are doing pretty good considering ;)
With all that's happened, the current situation, election time..perhaps
Wait a bit and the Gov will kick down to "Get it in Gear"?
Might be worth the wait if you're a Big Boy..they lose how if they wait/stall?
This is just the official Press Release..it's not like the Big Boys did not know this was coming. So where's the rush to get prepared, form a plan, get the Program in Gear?
They start now it will get in Gear in any significant way when/where?
Same rush as the rush to do Loan Mods imo...
Why?..
"Your company earned a record $19.0 billion in 2011, up 9% from the record earnings of $17.4 billion in 2010. Our return on tangible equity for 2011 was 15% — the same as last year. Relative to our competitors and given the prevailing economic environment, this is a good result".
Jamie Dimon, CEO of JP Morgan Chase...Letter to Shareholders.
Mess started when?..Bailout..Robo Signing..Settlements..Foreclosure Moratoriums..
Sounds to me like they are doing pretty good considering ;)
With all that's happened, the current situation, election time..perhaps
Wait a bit and the Gov will kick down to "Get it in Gear"?
Might be worth the wait if you're a Big Boy..they lose how if they wait/stall?
- hpvanc
- Contributions:3080
A lot of areas including mine have a glut of vacant properties and a dearth of available rentals.
I still think the best solution is to get the properties sold to and onto the rental market, rather than force the banks rent them and mismanage the properties. If we let the banks attempt to rent them out the federal government will probably wind up as the owner and manager on 80% of them within 2 years.
I still think the best solution is to get the properties sold to and onto the rental market, rather than force the banks rent them and mismanage the properties. If we let the banks attempt to rent them out the federal government will probably wind up as the owner and manager on 80% of them within 2 years.
- Pasadenan
- Contributions:26026
As far as I can tell, there are only two reasons to establish new rules, guidelines, and regulations:
1) There is some kind of "abuse" by those regulated companies in the regulated industries for those specific issues presently.
2) Political maneuvering to make it look to the public that existing politicians are actually doing something about a concern or issue, when actually nothing is being done.
I believe in this case, that it is the second one. I don't know of anything in the previous regulation requirements that stated the banks and lenders couldn't rent out their foreclosed assets.
And certainly, renting to the same parties that didn't pay their monthly mortgage payments doesn't make any sense as those that didn't pay their mortgage each month are not going to pay their rent each month either.
1) There is some kind of "abuse" by those regulated companies in the regulated industries for those specific issues presently.
2) Political maneuvering to make it look to the public that existing politicians are actually doing something about a concern or issue, when actually nothing is being done.
I believe in this case, that it is the second one. I don't know of anything in the previous regulation requirements that stated the banks and lenders couldn't rent out their foreclosed assets.
And certainly, renting to the same parties that didn't pay their monthly mortgage payments doesn't make any sense as those that didn't pay their mortgage each month are not going to pay their rent each month either.
- Dunes ..
- Contributions:3686
The REO Rental Program ;)
"FHFA Announces Interested Investors May Pre-Qualify For REO Initiative"
The REO Initiative will allow qualified investors to purchase pools of foreclosed properties with the requirement to rent the purchased properties for a specified number of years.
"FHFA Announces Interested Investors May Pre-Qualify For REO Initiative"
The REO Initiative will allow qualified investors to purchase pools of foreclosed properties with the requirement to rent the purchased properties for a specified number of years.
- Laurel Jaques, "LAUREL JAQUES"
- Contributions:309
The banks are planning to allow the occupant to stay in the property and a property manager will be assigned to handle the tenant/property issues. Reportedly there is another program involving bulk REO sales to investors who will be required to keep the occupant is the property for a period of time (read years).
Fed lays out rules for banks to rent REOs
"Fed lays out rules for banks to rent REOs"
"A new release from the Federal Reserve shows the agency is ready for banks to launch mass real estate owned rental programs to revive distressed assets clinging to their books.
The Fed laid out the ground rules in a report, providing firms holding REOs with advice on how to follow all applicable landlord tenant, state and federal housing regulations.
"The general policy of the Federal Reserve is that banking organizations should make good-faith efforts to dispose of REO properties at the earliest practicable date," the Federal Reserve said in a statement.
"Consistent with this policy, in light of the extraordinary market conditions that currently prevail, banking organizations may rent residential REO properties (within statutory and regulatory holding-period limits) without having to demonstrate continuous active marketing of the property, provided that suitable policies and procedures are followed.""
Full Article
Federal Reserve Press Release: April 5, 2012
Federal Reserve Board issues policy statement regarding rental of residential properties acquired in foreclosure
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