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The sales of non-performing residential mortgage loans by Fannie Mae, Freddie Mac, and HUD have been a lightning rod for controversy in the last year or so. Some claim the guidelines are too strict, which can discourage investors from participating. Others claim the guidelines are not strict enough, which could ultimately result in undesirable outcomes for borrowers. Both sides claim that ultimately neighborhoods will suffer as a result.
The government needs to find some middle ground with its NPL sales guidelines in order to minimize the risk to investors, borrowers, and taxpayers, according to the Urban Institute. A report suggested four ways in which the government can find that middle ground: require buyers of the loans to meet any one of several mandatory borrower outcomes; place restrictions on abandoned and low-value homes; make the data on the borrower outcomes more transparent; and encourage greater partnerships between the private and nonprofit sectors.
According to a survey of 975 homebuyers conducted by Redfin in May, one in four homebuyers reported that it was the high cost of rent that prompted them to go hunting for a house—a substantial increase from the share reported last summer. First time buyers drove the increase, with more than 50 percent of them citing high rents as the reason they were looking to buy a home—more than double the 25 percent reported in August.
