Only 2 years after they were taken over by the federal government, Fannie Mae and Freddie Mac are quickly becoming two of the country’s top home sellers – a challenging place to be in today’s tough housing market. By the end of June 2010 they owned more than 191,000 homes, twice the amount compared with June 2009. And this number is still growing because they are taking back homes faster than they can sell them.
To combat this, Fannie Mae is going to get tougher on the lenders that aren’t moving quickly enough to reclaim homes once it is clear the home is vacant or foreclosure alternatives aren’t possible. Even though it is expensive to hold onto these homes, these delays are costly to Fannie and Freddie, they also impact the shadow market as well as add to overall uncertainty in the housing market.
Now the question remains…will Fannie and Freddie soon have to become property managers too? Fannie is currently testing an effort in Chicago to rent vacant foreclosures rather than try to list them for sale. Will this work?