Bloomberg just put out an article on proposals being made to the Federal Housing Finance Agency (FHFA) for converting repossessed homes into rental programs. Readers of this blog can refer to the 10/11 entry on “New Report Outlines Mortgage Policy Recommendations” which referenced a report authored by the New America Foundation. Entitled “The Way Forward”, the brief outlined a three pronged strategy approach to helping alleviate the major stress points in the housing market. The third prong recommended converting severely delinquent borrowers into renters while recognizing that crafting the program would necessitate avoiding moral hazard issues.
The Bloomberg story doesn’t really break new ground other than reporting that the FHFA accepted 439 proposals from various industry players, soliciting ideas on how to help workout Fannie Mae and Freddie Mac’s growing inventory of real estate owned properties (REO’s). Bloomberg was able to uncover the respondent names through the Freedom of Information Act. The proposals had to be submitted to the FHFA by September 15.
Companies making proposals included: Deutsche Bank, Fortress Investment Group, Carrington Holdings, Ranieri Partners, Neuberger Berman and UBS.
Interestingly, according to Bloomberg, Amherst Mortgage, one of the more sophisticated broker/dealers in the space, did not submit a proposal because of concerns that their ideas would not be protected under the Freedom of Information Act. Stay tuned; this promises to be an interesting market play in the months and years ahead.
The FHFA release of the Response Summary can be accessed at http://www.fhfa.gov/webfiles/22805/REORFISubmissions_112911.pdf.
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