Government to turn foreclosed homes over to Goldman Sachs

[Brian4Liberty]

There were many people who said that the housing boom and bust would result in big banks taking possession of massive amounts of US real estate. It looks like that prediction is now becoming reality, but in an even worse way than ever imagined.

Talk about being screwed in multiple ways, this is the worse case scenario for your average American:

- First people lost their homes.

- The government (taxpayers) bought these bad loans at face value, completely protecting the corrupt bankers, and creating a huge amount of public debt for those same average taxpayers.

- The government will now turn these properties over to crony bankers at pennies on the dollar (once again at the expense of the taxpayers).

- The real market bottom will still not be reached, as these homes will become part of investment trusts. They will just hold onto these homes. Housing prices will remain out of reach for the peons.

-There is no incentive to rent them, they are just holding the assets. It will actually decrease the number of available rentals, and drive up prices for the poorest Americans. This will be like commercial real estate trusts, where massive amounts of commercial space lies dormant for years, if not decades.

http://www.thestreet.com/story/11224917/1/a-huge-housing-bargain--but-not-for-you.html

A Huge Housing Bargain -- but Not for You
By Roger Arnold 08/18/11

NEW YORK (RealMoney) -- The largest transfer of wealth from the public to private sector is about to begin. The federal government will be bulk-selling the massive portfolio of foreclosed homes now owned by HUD, Fannie Mae and Freddie Mac to private investors -- vulture funds.

These homes, which are now the property of the U.S. government, the U.S. taxpayer, U.S. citizens collectively, are going to be sold to private investor conglomerates at extraordinarily large discounts to real value.

You and I will not be allowed to participate. These investors will come from the private-equity and hedge-fund community, Goldman Sachs and its derivatives, as well as foreign sovereign wealth funds that can bring a billion dollars or more to each transaction.

In the process, these investors will instantaneously become the largest improved real estate owners and landlords in the world. The U.S. taxpayer will get pennies on the dollar for these homes and then be allowed to rent them back at market rates.
...
The way to keep taxpayers from pushing back is to structure the RFI so that the real intention, the bulk sales, is masked by feel-good goals, such as stabilizing neighborhoods and increasing the supply of rental properties.

As intended, the mass media are playing their part in classic style. Every major newspaper in the U.S. has run articles discussing the plan as a rental conversion, allowing readers to assume that Fannie, Freddie and HUD will be renting the properties directly to families who need housing. And although there is an allowance for these kinds of rentals, it is a minor political facade to the obvious true goal of bulk-sale privatization of these homes.

The investors in this program have been waiting for this opportunity since the portfolio of homes owned by HUD began to spike in 2007, when foreclosures surged first in the "Rust Belt," principally Ohio and Michigan.
...
Even before this crisis occurred, HUD, i.e. the U.S. government, was the largest improved real estate owner in the world, because of its portfolio of foreclosed homes, which is classified as "real estate owned" (REO). The entire massive HUD REO Portfolio is quietly managed by a handful of private firms already, a group listed as Management and Marketing Contractors.

These M&M companies are principally owned by and employ former high-ranking government officials from the various germane agencies -- the Treasury, HUD, FHA and others. And they will provide the necessary access to the current government employees who are tasked with bringing this program to fruition. Once the privatization is complete, those government employees will move from their positions, and many will take up new employment at one of the M&Ms or the new vulture funds.

I am not currently aware of any way for retail investors to participate in this process.

It is probable, however, that once the privatization has occurred and the properties are generating rental income for the investors, the initial investors will cash out by forming real estate investment trusts (REITs), real estate operating companies (REOCs) or limited partnerships (LPs) that will be made available to retail investors.

 

[sevin]

Well, there will be plenty of houses available for squatters.

 

[PastaRocket848]

in 2008, the people basically elected the board of goldman sachs to the office of the presidency. obama's cabinet is chock full of them. how can people expect any less?

 

[Noob]

Well, there will be plenty of houses available for squatters.

Get this apartment building before its to late..

http://www.gatecityrealestate.com/listing-mls-540591-101-main-st-bancroft-id-83217-19505.html

 

[Travlyr]

Now all that's left to accomplish is to give government contractors the contract to destroy the homes so that we can build new ones and thereby stimulate the economy and create jobs. Problems solved!

As intended, the mass media are playing their part in classic style.

Time Magazine: How To Save The Housing Market: Destroy Houses

 

[bunklocoempire]

Bump for second/third shift.

Screwed coming and going indeed.

Folks are feeling the pain, they have to know why.



Bunkloco

 

[Brian4Liberty]

This is an example of how both the Democrats and Republicans are lying about the budget problems. The government (now) has assets in the form of all of these foreclosed homes. Instead of auctioning them off to the highest bidder, they are being distributed in back rooms to crony Wall St players. The difference in potential revenue is probably as astronomical as the Federal debt. You would think the Democrats would be drooling over the revenue that could come from the auctions: higher prices paid, and they could probably impose an "auction fee" of some sort, say 5% of the purchase price with a minimum fee of $100 or something.

But no, both the Democrats and Republicans are in agreement: give it away to cronies in smoky backrooms, peons need not apply.

 

[CaptainAmerica]

Some people pay the bank back in cementing the septic lines

 

[YumYum]

Some people pay the bank back in cementing the septic lines

I wouldn't recommend doing that. The offender could land in prison.

 

[Travlyr]

How low will they go?

 

[Brian4Liberty]

Here is the contact information for the government's request for proposals.

http://www.fhfa.gov/webfiles/22366/RFIFinal081011.pdf

Request for Information:
Enterprise/FHA REO Asset Disposition
August 10, 2011

The Federal Housing Finance Agency (FHFA), in consultation with the U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development, is issuing this Request for Information (RFI) to solicit ideas for sales, joint ventures, or other strategies to augment and enhance Real Estate-Owned (REO) asset disposition programs of Fannie Mae and Freddie Mac (the Enterprises) and the Federal Housing Administration (FHA). The agencies are exploring alternatives that will facilitate the current and future disposition of REO, improve loss recoveries compared to individual retail REO sales, help stabilize neighborhoods and local home values, and where feasible and appropriate, improve the supply of rental housing.
...
Deadline for response
Responses are requested by September 15. Responses must be in .pdf format, and submitted to [email protected].

[email protected]

[email protected]

What would you suggest for the government to do with all of these foreclosures?

Some ideas:

- Open and competitive auctions to the highest US citizen bidder, focusing especially on local individuals interested in purchasing.
- Create one or more traveling auctions, so that the auction can always be held fairly close to the real estate being auctioned (within 100 mile radius).
- Generate additional revenue via an "auction fee of $500 + 5% of purchase price".

Benefits of this approach:

- Receive the highest price possible through the open and competitive auction process.
- Home prices will be stabilized after the auction, as the uncertainty of foreclosed homes will be removed from the marketplace.
- Local community members, who care the most about their communities, will be given the opportunity to purchase a home to live in, which reduces the demand for rental units.
- Local community members, who care the most about their communities, will be given the opportunity to purchase homes as rental properties, thus increasing the supply of available rentals at true market prices.
- Much needed Federal Revenue will be generated by the auction fees.
- History has shown that real estate often lays fallow when it becomes part of Real Estate Investment Trusts. The real estate becomes a commodity, stored for it's asset value, and there is much less incentive for the property to be rented. Transferring residential real estate into investment trusts will result in a decrease in the amount of rentals available.
- Open auctions will eliminate the appearance of insider, crony, backroom deals, and provide for more transparency and fairness to local communities, local investors, and the rental markets.

 

[Brian4Liberty]

Contacting our representatives on this issue might also help.

Any additional ideas?

 

[Brian4Liberty]

Bump for input.

 

[Travlyr]

When I sell property, I offer it to the highest and best bidder for cash to the widest audience I can justify the advertising costs. That's what I would do here as well.

Contacting representatives in this day and age is likely a waste of time because they are going to do whatever favors the powers-that-be anyway.

 

[Seraphim]

Exactly...All of these big government Obama-bots are so god damn stupid it's almost impossible to be so fuckin' clueless.

in 2008, the people basically elected the board of goldman sachs to the office of the presidency. obama's cabinet is chock full of them. how can people expect any less?

 

[Brian4Liberty]

When I sell property, I offer it to the highest and best bidder for cash to the widest audience I can justify the advertising costs. That's what I would do here as well.

Contacting representatives in this day and age is likely a waste of time because they are going to do whatever favors the powers-that-be anyway.

Yeah, an open auction is a much better way to go.

Probably right about the representatives. There was massive protest against TARP, and they did it anyway. This rip off of the taxpayers is under the radar for some reason. (Intentionally, no doubt).

 

[WilliamC]

When I sell property, I offer it to the highest and best bidder for cash to the widest audience I can justify the advertising costs. That's what I would do here as well.

Contacting representatives in this day and age is likely a waste of time because they are going to do whatever favors the powers-that-be anyway.

If this doesn't happen the property will be trashed as per post #8

There's simply too much property spread over too much area for it to be secured.

 

[Brian4Liberty]

And squating may be become very popular.

 

[Feeding the Abscess]

And squating may be become very popular.

I'd rather the property be squatted than given to Goldman Sachs.

 

[Brian4Liberty]

I'd rather the property be squatted than given to Goldman Sachs.

Absolutely.

Can't believe the lack of outrage over more government handouts to Goldman Sachs and assorted Wall St. interests and hedge funds.