Government Ready to Sell Foreclosure, or Become Landlords- Santa Clarita Real Estate Market Update

Cherrie & Zach
Published on January 9, 2012

Government Ready to Sell Foreclosure, or Become Landlords- Santa Clarita Real Estate Market Update

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Great article from CNBC about the “shadow inventory” we hear so much about…

There currently are about a quarter of a million foreclosed properties on the books of Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA), and millions more are coming.

The foreclosure processing delays of last year created a mammoth backlog of properties yet to be processed, which are just now being re-started. One of the initiatives of this program is for the federal government to be in the position to mitigate and manage any new wave of foreclosures, sources say.

Late-stage delinquencies still in the pipeline number close to two million, according to a new report from Lender Processing Services. Foreclosure starts outnumber foreclosure sales by two to one and “the trend toward fewer loans becoming delinquent, which dominated 2010 and the first quarter of 2011, appears to have halted,” according to LPS.

Knowing this all too well, the Treasury Department, Federal Reserve, HUD, FDIC, Fannie Mae and Freddie Mac, with their conservator, the Federal Housing Finance Agency (FHFA) at the helm, are engaged in a collaborative effort to face this new wave of foreclosures head on and figure out a way to keep these properties from sitting on the books of the government and sitting empty in the nation’s neighborhoods.

What does this mean for us in Santa Clarita? The talk of this shadow inventory has existed for years. The idea of taking all these properties and turning them into rentals will affect the rental market that we have been discussing. This could either, stabilize prices or drive them down depending on the quantities. Anytime there is a large influx inventory in any market it naturally will affect prices negatively. Unless of course demand is ultra high, than it just fills the demand and stabilizes the already inflated prices.

The idea of taking these Santa Clarita foreclosed homes and turning them into rentals is interesting, but really we probably shouldn’t  get excited until it actually happens, because talks of this nature have been around for some time

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Government Ready to Sell Foreclosure, or Become Landlords- Santa Clarita Real Estate Market Update
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