Poor Us: The Great Depression 2.0

May 15, 2009

There’s A Pony In There Somewhere: US Owns 38,000 (and counting) Foreclosed Homes

Pony Rides by kirawolfess Deviantart.com

How do the rich get richer? Now that Bernie Madoff is out of business, a lot of previously well-fixed folks are themselves trying to remember the magic formula.

Rest assured, for every never-rich person such as myself contemplating work without end, there is a get-rich schemer scanning the economic wasteland for ways to turn catastrophe into cash. A handful will undoubtedly succeed in finding a pony wrapped up in all that bad paper.

Case in point: I once worked for a man of significant wealth who had made his money buying up real estate abandoned by the military following WWII. Sites in strategic military locations like the strip of ocean frontage now known as Marina del Rey, CA.

That’s why when I read today’s headlines about the governments’ growing stockpile of foreclosed homes, and burgeoning tent cities I can’t help but think that somewhere someone is seeing the ghost neighborhoods of Detroit the the floating cities of the future or Hobbity tree-house retirement villages for eco-sensitive baby boomers.

Gov’t losses big in home market – USATODAY.com

Since 2007, the Department of Housing and Urban Development has acquired at least 110,000 foreclosed houses, its records show, spending about $12.2 billion to reimburse lenders after the owners defaulted on government-backed loans. So far, HUD has been able to recover only about $5.5 billion by reselling them. It has about 38,000 homes still for sale.

The government’s houses are divided among a handful of agencies. Most came into federal hands when borrowers defaulted on government-backed mortgages; in some cases, the government foreclosed on loans it wrote, or took over foreclosed properties from private lenders. The list doesn’t include homes repossessed by federally chartered mortgage giants Fannie Mae and Freddie Mac.

Gov't losses big in home market - USATODAY.com

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