GSEs are the New Slumlords!
Disclaimer: I rent and will continue to rent and OMGObama can take his first time homebuyer credit and stick it directly up his ass, I'm not falling for that trap.
So what are we talking about now? Fannie and Freddie in the landlord business. Oh give it up already, what next? Cash for Clunkers for depreciated properties that are still on book at 2007 prices? Bwhahahaha LMFAO!
Market Ticker tells us what's up:
WTF is this?Thousands of borrowers on the verge of foreclosure will soon have the
The government-controlled company, through its new "Deed for Lease" program, will allow borrowers to transfer ownership to Fannie Mae and sign a one-year lease, with month-to-month extensions after that.
This has exactly nothing to do with helping "homeowners."
It is entirely about Fannie not having to recognize the written-down value of these houses - that is, allowing them to hold the "mark" on the loan at it's original value, rather than recognize the loss.The rental program is designed to help homeowners who don't qualify for a loan modification under the Obama administration's plan, but still want to remain in their homes. Fannie Mae is not planning to market the homes for sale during the one-year rental period.
Fannie won't sell the properties because then they would have to recognize the mark.
This is nothing other than yet another scam to avoid recognition of bad paper Fannie took on their books and has a HUGE embedded loss.
But wait, that's not all!
WC Varones in US to Renters - GFY!:
And that doesn't mean 'good for you' this time:
Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.
"This is probably the last extension," said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.
Zero Hedge nailed it as well, and I ask at what point does the magic run out? Can we really just fudge our GDP, unemployment, debt, and entire national monetary composition forever? You can't tell me the rest of the world buys this, nor can you convince me that the powers that be actually believe they do.
The situation in housing is taking a turn for the surreal. As of tomorrow, bankrupt Fannie Mae will offer deadbeat housing speculators, aka homeowners who bought at the market peak and now can't pay their mortgage, the option to live in their foreclosed upon home while renting it out on a month-to-month basis from the government. As the WSJ reports, "borrowers-turned-tenants will be able to sign leases of up to 12 months and will pay market rents, which in most cases are lower than the cost of mortgage payments." The catch: Fannie will be able to hold the home as not listed for sale. In essence the shadow inventory of millions of zombie houses will skyrocket overnight, further complicating any objective analyses of how many houses are available on the market (the answer: many, many more than you think, but the exact number escapes us). And with housing still collapsing, and jobs still non-existent, more and more people are likely to take advantage of this latest taxpayer subsidized boondoggle.
Holy fuck. I give up. Seriously.