January 09, 2012 2:01 PM
Spanky and the Gang are at it again. Not content with previous shenanigans in manipulating and propping up home prices, they’re back at it again.
Word is out that the Obama Administration, in conjunction with Freddie, Fannie, Treasury, FED, FDIC, HUD and FHFA, is preparing programs to sell foreclosed properties in bulk to investors interested in managing the inventory as rental property, rather than as for sale property.
My numbers indicate that we will have 10 to 15 million homes that will either face short sale or foreclosure in the next 5 to 10 years. These numbers loom in spite of all the previous programs implemented by the Federal government intended to support the housing market.
The fact that the Obama administration is developing a plan with such a broad sweep indicates admission and acknowledgment of what we have been saying for a long while: our country does not have enough qualified homebuyers to absorb the housing inventory developed during the housing bubble.
Housing bulls might cheer this news, in hopes that clearing away the deadwood will open up fresh growth in sales and pricing for organic sales and buyers. But another way to look at this news is that the Federal government is about to enact a sweeping program, in conjunction with private investors, in yet one more effort to confront the problem we predicted all along.
This is the opening act and there should be more to come. There is no fair or accurate real market pricing for homes in the country so long as natural market forces are not allowed to run their course. The US housing market is in the hands of a gang of hucksters wanting to unload overpriced inventory before interest rates necessarily rise.
Logan Mohtashami is a senior loan officer at his family owned mortgage company AMC Lending Group, which has been providing mortgage services for California residents since 1988