Fan-Fred and FHA Together Own a City the Size of Baltimore
Freddie Mac, the smaller of the two government-owned mortgage-backers, lost $4.7 billion last quarter and has asked the government for another $1.8 billion to keep chugging along. Meantime, Freddie’s inventory of foreclosed homes has doubled since the government took it over in the fall of 2008 (HT CR). The company now owns about 62,000 homes.
Fannie Mae is twice as big, with 129,000 foreclosed homes—called REOs for “real estate owned”—on its books. That’s a number of lawns to mow. Add the FHA’s inventory and you get a grand total of about 245,000 homes sitting empty on the government’s balance sheet, courtesy of triple-F. That is a city about the size of Baltimore, which by now has fewer than 250,000 households. Picture every occupied house in Baltimore City. Now picture them empty. That’s the situation we have now, all spread across the country.
And taxpayers basically own them all.
The Sun reported this week that homelessness is up 25 percent in Baltimore County. No quick way to know how many vacant houses in our area are Fannie/Freddie/FHA-owned, but Fannie alone currently has 103 houses for sale in Baltimore County, according to its web site. There are doubtless hundreds more in the pipeline. I think we could all be forgiven for wondering why the government, while it’s shoveling money at the already rich and corrupt in a bid to “save the economic system,” doesn’t just go ahead and put some of those homeless families into some of its REOs.
Of course, a generous proportion of Freddie’s (and Fannie’s, and FHA’s) inventory will be uninhabitable dreck, the result of mortgage frauds that have, without comment from policymakers, dominated the markets for the past four to six years. Houses such as this $155,000 beauty, this ($251,000), and this ($325,000) may not comprise the majority of the GSEs’ REOs, but they’ll be a substantial part.
Remember folks, those F’s stand for anything but failure.