The Obama administration will announce plans Wednesday to seek investors' ideas for turning thousands of foreclosed properties owned by government-backed entities into rental homes, according to administration officials, the Wall Street Journal reported on its blog.
The move is intended to put a floor under declining home prices by creating a way to deal with hundreds of thousands of potential foreclosures in coming years.
Mortgage giants Fannie Mae and Freddie Mac sold a record 100,000 homes during the second quarter. Together with the Federal Housing Administration (FHA), the entities owned about 250,000 homes at the end of June, or around half of all unsold, repossessed properties. Another 830,000 homes backed by the entities are in some stage of foreclosure, according to Barclays Capital.
The Federal Housing Finance Agency, which regulates Fannie and Freddie, will issue the formal "request for information" with the administration to solicit proposals that shrink the glut of foreclosed properties weighing on the residential market.
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