Various ideas have been suggested to handle the crisis, reports Bloomberg, including ideas on how the FHFA prevent any more decreases in home values, how they can set about turning foreclosed homes into rental properties, how they can stabilize neighborhoods and try to stem losses.
Over half of all mortgages in the US are serviced by Fannie Mae and Freddie Mac, so the potential impact of a foreclosure-to-rental program would be extremely significant, according to real estate experts.
Altogether, more than 4,000 proposals were received by the FHFA after its call for submissions, but the agency said that only 10% of them were deemed viable.
Corinne Russell, spokesperson for the FHFA, told Bloomberg that the agency is urgently trying to lay down the groundwork so that “good initial transactions can be developed in early 2012.”
A number of interesting proposals were made with regards to how the foreclosure-rental program might work, such as one involving joint-venture partnerships with investors.
Both Fannie Mae and Freddie Mac are seeking solutions to the foreclosure problem as soon as possible. The latest available stats show that Fannie Mae is currently maintaining 122,616 foreclosures (as of September 30), worth approximately $11 billion. Bloomberg reported that these properties cost some $733 million just in maintenance costs for the third quarter. Freddie Mac currently owns 59,616 foreclosed homes, which cost $221 million to maintain over the third quarter.