Does anyone know what the Govt. gets in all the bailouts they've recently done. As I understand the AIG bailout, in the long run it could be very profitable for the FED.
I wonder if the same can be said for the bailout of Fannie, Freddie, and others. I suspect if the Govt. is actually ending up with all the foreclosed properties over time it will prove to be a great investment. I don't know that taxpayers will ever be rewarded, but the Federal coffer's will be.
The Federal Govt. could have prevented all this if they were looking at what was happening with accelerated foreclosure occurring as teaser loans matured and cheap financing wasn't available. I'm not suggesting the govt. should have made cheap loans, though some rate reductions earlier by the FED would certainly have helped. What I'm suggesting is the Govt. should have had a program that permitted the foreclosed homes to remain or be reoccupied in a rental program that in time would have permitted the renter to purchase the property. In some cases that renter might be the original purchaser of the home who couldn't afford the payments when the teaser rates went up.
I know there are no simple answers, but we have a country of people who need homes and can't afford them, and we have a nation full of empty foreclosed homes that are a glut on the market and preclude new construction which would employ millions of Americans. It seems to me that the Banks, Fanny, Freddie, etc would be far better off with some income from most if not all these foreclosed properties, even if it's only a fraction of what they'd have been paid on loans on the properties. If the banks, Fanny, Freddie, or we taxpayers own the homes, aren't we better off getting rent for them now, with the ability to sell them off later when the market improves, or are we better off letting the get run down, provide no income, and glut the market preventing it from improving. To me this is a no brainer.
This wouldn't be a gift to those getting the homes, they'd have to pay rent, they'd have to properly maintain them, but they'd also be credited a small portion of their rent toward a down payment, the longer they rented, the greater that would be. Hopefully at some point in the future the renters would become owners, if not, after sufficient time and notification the owner of the property could choose to sell the property where the new owner could maintain the tenant, or notify them they legally must find another residence.
This certainly won't fix everything, but right now nothing's being fixed, we just keep applying multi billion dollar band-aids.
Gary |
