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Inside Washington (09/19/2011)
* WASHINGTON (9/20/11)--The Obama administration’s foreclosure-to-rental program has proved difficult to implement (American Banker Sept. 19). The government is seeking to rent out foreclosed properties held by Fannie Mae, Freddie Mac and the Federal Housing Administration until the housing market stabilizes. But several obstacles to the program’s success have emerged. Goals have yet to be established for the program. The Federal Housing Finance Agency, which oversees Fannie and Freddie, hopes to stabilize neighborhoods and home values, but consumer groups believe the program should also serve affordable housing and energy efficiency goals. The program’s structure also has yet to be determined. One approach is for the government to hire contractors to renovate the foreclosed properties and then rent out the units before selling them. Under another strategy, the government could sell the properties with the contingency that the buyers will renovate them. In a third approach, the government would jointly purchase the properties with buyers, and share in any price appreciation. The government must also be sure buyers have an understanding of local housing markets. Although a large number of institutional investors are waiting to purchase foreclosed homes, the housing market is a very localized business, said Ivy Zelman, the chief executive of Zelman & Associates ... * WASHINGTON (9/20/11)--Fannie Mae and Freddie Mac are raising the guarantee fees they charge mortgage lenders and the government-sponsored enterprises may end the volume discounts they give big banks, Ed DeMarco, acting director of the Federal Housing Finance Agency, said Monday (American Banker Sept. 19). The volume discounts may be phased out because they were based on competition between Fannie and Freddie to gain market share, said DeMarco, speaking before a conference in Raleigh, N.C. Because Fannie and Freddie are operating under conservatorship, they no longer compete with each other’s business from big banks. Both government-sponsored enterprises began raising guarantee fees earlier this year and will continue doing so through 2012, DeMarco said ...


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