What? FED Encourages Banks To Rent Foreclosures!

By
Real Estate Broker/Owner with eXp Realty LLC NM Broker License 16161
https://activerain.com/droplet/yvS

Emily Medvec Realtor Santa Fe NM

Here is some extraordinary real estate news on the horizon you may have missed on this Passover and Easter weekend when everyone’s attention is on family, community and faith. Our Federal Reserve chose to encourage banks to rent their foreclosed properties by issuing new guidelines. If you missed this news, I am sure you are not the only one.

The new policies apply to banks who own real property or are about to own homes in distress from the bank’s perspective. It appears the Fed has endorsed an opportunity for banks giving them the option to rent their foreclosed and distressed properties as their new strategy and solution to the collapse of the housing market. Does anyone have any clue on where NAR (National Association of Realtors) is on this issue given their “good time to buy” policy and commercials?

The Fed states its regulations will permit the rental of foreclosed properties to tenants. It encouraged the banks to establish policies for renting foreclosures including a way to determine if the homes are safe to occupy. I assume this is to avoid “as is” rentals!

It appears the Fed Chairman Ben Bernanke is encouraging banks to become landlords. Here is a link to the article I read on Bloomberg. What is your take on this strategy? How will it impact your local real estate market? What happened to buy vs rent if you are a buyer? Do home owners who want or need to rent now have to to compete with banks in this way as well?

****************************************

Posted by

Our Santa Fe real estate market is a local one. Search All Santa Fe Listings Here and get results in both an easy list or map search. If you want to see a SOLD sign on your property or you want to make a lifestyle change by moving here, call me at 505-660-4541 to schedule a real estate consultation. No one has time or money to waste in this new landscape of real estate online. I am available to help you and make a positive difference in your real estate experience. Remember dreams are made a reality only when you act on them. Emily Medvec

Today, I represent Sellers and Buyers in all price ranges in Santa Fe and throughout northern New Mexico. My focus is to use my experience, vision and strategies to find you opportunities and solutions. My goal is always to save you time and money whether you are selling or buying any type of Santa Fe real estate, including homes, land, town homes, condominiums, ranches and commercial property. Here are recent reviews from my past clients about my know-how and service. Until you are ready to Buy or Sell, let's connect and learn more about each other on Facebook or Twitter

Emily Medvec Copyright 2019 All Rights Reserved 2007-2019

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
ActiveRain Community
Groups:
Bananatude
Addicted to Active Rain
Realtors®
Bartender, Make it a Double
"Whacked"!!!
Tags:
fed encourages banks to rent foreclosures
as is rentals
good time to buy
real estate
emilymedvec

Spam prevention
Show All Comments
Ambassador
3,088,639
Anna Banana Kruchten CRS CRB, Phoenix Broker
HomeSmart Real Estate BR030809000 - Phoenix, AZ
602-380-4886

Emily I have been reading about this.  They need to get out of the real estate business and let things fly where they may.  Government as property managers now?  No!!!

Apr 07, 2012 04:12 AM #1
Ambassador
416,562
Emily Medvec
eXp Realty LLC - Santa Fe, NM
Realtor | Serving Santa Fe & Northern NM

Anna, I still remember when NAR used to lobby against banks being in real estate. This Fed strategy is far from any solution to our local real estate markets. Most foreclosed properties are "as is" homes. How could they be safe to rent?

Apr 07, 2012 04:20 AM #2
Rainmaker
2,359,906
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

First, the FED, needs to stop suggesting anything to do with real estate. The FED can't manage itself, so they should not make any suggestions about real estate.

Second, banks need to focus on what they do best and real estate ownership and rental is certainly not what they know.

Thank you for sharing the post with all of us.

Apr 07, 2012 04:55 AM #3
Ambassador
3,206,782
Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

We've seen banks as landlords on foreclosed homes for a couple years in Northern Virginia.  It's annoying, to say the least.

Apr 07, 2012 06:21 AM #4
Rainmaker
1,283,364
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Emily:  I think in the Fed's mind, that they are keeping many neighborhoods from slipping even further into the abys ... especially in larger cities.  Full Blocks in many of those cities (including Chicago) seem to be all foreclosures ... both residential and lots both.  It's been my understanding when reading many of the articles surrounding this issue, that the Fed is hoping that the "tenants" will not be new, but the homeowners facing the foreclosures themselves that remain in the homes, thus providing continuity and strength to the neighborhoods and families both.  As typical, time will tell how this pans out.  Personally I have reservations ... but we'll see, right??

Gene 

Apr 07, 2012 06:56 AM #5
Rainmaker
1,607,805
Charles Stallions Real Estate Services
Charles Stallions Real Estate Services Inc - Gulf Breeze, FL
Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

Hey it is the perfect way for banks too get into real estate through a  back door they are not fooling anyone

Apr 07, 2012 06:57 AM #6
Ambassador
4,102,800
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Emily this is the first that I have heard of this, and I am not sure how I feel about it.  I can see the potential for this to have a negative impact on the Real Estate Market.

Apr 07, 2012 07:41 AM #7
Ambassador
416,562
Emily Medvec
eXp Realty LLC - Santa Fe, NM
Realtor | Serving Santa Fe & Northern NM

Joe, I agree. I do not see how the FED can create what appears to be more of a national housing policy by allowing any bank to set rental standards in virtually any community where there are foreclosures.

Chris, this has not been the case in Santa Fe. The banks are selling the properties to recoup their "loss" or providing a loan modification and/or short sale.

Gene, there is certainly a difference in every local real estate market. At the same time, the Fed appears to be creating policy applicable to all local markets. If the homes are distressed, the odds are they have not been maintained nor can be if they are underwater. Like you have read many stories, mostly focusing assisting investors to purchase blocks of foreclosed homes. I am still not clear what this means in the short run. Do former homeowners pay "rent" to stay in their underwater home instead of the banks doing a loan modification. For me, the gray area just gets grayer.

George, what I wonder about in addition to our local real markets is the future value of home ownership itself. And then, why now?

Apr 07, 2012 08:45 AM #8
Ambassador
416,562
Emily Medvec
eXp Realty LLC - Santa Fe, NM
Realtor | Serving Santa Fe & Northern NM

Joyce, I agree. They are already in real estate. This advocacy by the FED gives them a set of keys.

Apr 07, 2012 08:47 AM #9
Rainmaker
1,283,364
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Not sure, Emily ... because as usual with the government, little in real details has been provided ... which is exactly what we found with HARP 2.0 for months and months.  I am sure the remaining details, and how to implement them, will arrive as it has in the past.  In "dribs and drabs" with no real clarity ... and lots of frustration ...

Gene

Apr 07, 2012 10:03 AM #10
Ambassador
416,562
Emily Medvec
eXp Realty LLC - Santa Fe, NM
Realtor | Serving Santa Fe & Northern NM

Gene, thank you for the re-visit and your insights. What is confusing to me is how the FED is involved in what appears to be more of a national housing policy to allow banks to rent their foreclosed properties. The housing collapse did not just happen yesterday. We are years into resolving this major correction to the housing market and the new norm of  real estate values, property taxes and mortgage financing. I agree, "dribs and drabs" is far from being anything but frustration.

Apr 07, 2012 11:38 AM #11
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Ambassador
416,562

Emily Medvec

Realtor | Serving Santa Fe & Northern NM
Emily Medvec Sells Santa Fe Real Estate! Call/Text 505-660-4541
*
*
*
*

Additional Information