MORE PROOF: DUMB IDEAS NEVER DIE
The Miami Herald: “Freddie Mac Comes To Town Trying To Spark Home Sales”
Hoping to reduce its inventory of distressed properties, the Federal Home Loan Mortgage Corp., commonly known as Freddie Mac, hosted about 300 South Florida real estate agents at two events this week to give them tips on selling government-owned homes. . . .
Freddie Mac is hoping to . . . sell homes primarily to people who will live in them and not use them as investments, said Sharon Bartlett, director of Freddie’s foreclosure sale division. About 70 percent of Freddie Mac foreclosure sales go to homeowners, rather than investors, according to regulatory filings.
“We give a 15-day ‘first look’ [exclusive buying opportunity] for homebuyers,” Bartlett told the audience during Friday’s event in Davie. “We do it to increase homeownership.” [Emph. added]
Ooof. Where’s my aspirin? In the highly stressed South Florida housing market lately, typically 60% of sales are to investors who pay cash, renovate the properties, and turn around and profitably rent them. That’s good, not bad. It’s what the beginning of a housing recovery looks like. Yet Freddie Mac skews its marketing effort, with that idiotic two-week first look, for example, so that 70% of its sales go to would-be owner-occupiers, all in order to “increase home ownership.” One’s head truly hurts. One of the enduring lessons of the housing bubble and its resulting collapse has to be that the policy of encouraging homeownership simply for the sake of homeownership is a disaster. It has destroyed value, bankrupted families, and kept hapless buyers tethered to properties when they might otherwise move out and on to markets where they might actually find a job. The government should tell Fannie and Freddie to cut it out with this misguided social mission. If nothing else it will move its inventory faster and at better prices. Now that would be a good thing. . . .