Feds consider proposals for foreclosure-rental plan

The Federal Housing Finance Agency (FHFA) received more than 400 proposals on how it should handle the high number of foreclosures that are plaguing many markets across the country.

The proposals suggest various ideas on how the FHFA can go about turning thousands of repossessed homes that Fannie Mae and Freddie Mac own into rentals, in trying to curb losses, stabilize neighborhoods, and prevent further drops to housing values.

Fannie and Freddie service more than half of all U.S. home mortgages so any foreclosure-to-rental program could have a significant impact on the housing market, real estate experts say. The FHFA received more than 4,000 submissions during its call for proposals – however, only about 10 percent were deemed valid, the agency said.

As of September 30, Fannie Mae had 122,616 foreclosures with a carrying value of $11 billion – costing Fannie $733 million to maintain in the third quarter alone, according to a Securities and Exchange Commission filing. Meanwhile, Freddie Mac owned 59,6161 foreclosures, costing it $221 million to operate and manage in the third quarter.