Should HUD Practice Social Engineering?
With a FHA loan homes have become affordable, which sounds like a good idea.
But, when someone forecloses on a FHA loan and HUD picks up ownership of the house, should they, then, practice social engineering?
HUD is not in the business of owning real estate, so they should put the properties that they obtain on the market as quickly as possible and to the largest buyer pool possible.
No, HUD creates all types of categories of buyers and makes properties available to some groups and not to other groups.
Here is one: Good Neighbor Next Door. What is a good neighbor? Is it a teacher, a police officer, or the like? Apparently so. So what does that make me? Am I a bad neighbor next door?
Here is another one: Government agencies and non-profits. Does HUD make more money by selling to these entities? I do not think that they do. Why are they excluding investors?
Here is another one: Owner-occupants. Many HUD owned properties, if not most, are in need of work. Most owner-occupant buyers do not know about renovating a house, but many investors do. Why exclude the investors, even if it is only for a few days or weeks? We could argue that a buyer could get a property for a lower price if the property needs work and they choose to pay a contractor to do the work as would be the case with a renovation loan as compared to buying the house from an investor who has already renovated the home, because the investor would include profit in the price. However, the investor, typically, can complete the renovation at a much lower cost, which can offset the profit that is then included in the price.
If bidding is open to everyone, then no buyers would be excluded. Maybe investors, and bad neighbors next door need to become protected classes of buyers.