NAR Opposes Government Backed Plan To Rent Foreclosures
As the Federal Housing Finance Agency (FHFA) begins accepting initial applications for their REO to rental program, the National Association of Realtors (NAR) have openly opposed the program. According to many realtors, the rental program won’t do much to alleviate the foreclosure crisis but could unfairly impact the ability of real estate agents to earn a profit.
Under the proposed payday loans program, foreclosures would be bundled and sold to the highest bidder. The bundled foreclosures would then be rented back to the community using approved real estate management companies (which in theory could be the investor(s) who purchased the properties). The idea is to relieve the pressure on the foreclosure market and get properties back into the hands of community members. The problem is that some realtors are concerned that foreclosures could be snapped up by rental bidders before they’ve had enough time to sell in the open market. While there is no exact timeframe for when a foreclosure would become eligible for the rental program, it is estimated that properties would remain on the market for at least 60 days before they could be bid on by investors interested in the rental program.
But is this enough time? And is the program really necessary to alleviate the foreclosure crisis? Some realtors have argued that the program might be more useful in states which require foreclosures to go through complex court procedures. Court foreclosures take more time and the court systems are more likely to become backlogged. But even if the REO to rental program temporarily relieves foreclosure backlogs, what will happen once the rental period has expired? Will we once again see a flood of foreclosures entering the open market? And will this REO to rental program negatively impact foreclosure sales by encouraging potential buyers to rent properties instead? The current administration must thoroughly examine these questions to get an idea of how the rental program could inadvertently cause more harm than good. To find out more about what it takes to qualify as a bidder in this REO to rental program, read FHFA’s latest press release.
What are your thoughts? Feel free to leave comments below! 🙂
Leave a ReplyWant to join the discussion?
Feel free to contribute!