Here’s another socialism/statism/corporatism (take your pick) success story. Fannie Mae and Freddie Mac now own more homes than the number of homes in all of the city of Seattle. When they do sell the homes, it’s at a loss of about 40%. To top it off, they’re we’re paying more than a billion dollars a year for upkeep on these homes.
St. Louis Today: Fannie Mae and Freddie Mac took over a foreclosed home roughly every 90 seconds during the first three months of the year. They owned 163,828 houses at the end of March, a virtual city with more houses than Seattle. The mortgage finance companies, created by Congress to help Americans buy homes, have become two of the nation’s largest landlords.
Bill Bridwell, a real estate agent in the desert south of Phoenix, is among the thousands of agents hired nationwide by the companies to sell those foreclosures, recouping some of the money that borrowers failed to repay. In a good week, he sells 20 homes and Fannie sends another 20 listings his way.
“We’re all working for the government now,” said Bridwell on a recent sun-baked morning, steering a Hummer through subdivisions laid out like circuit boards on the desert floor.
For all the focus on the historic federal rescue of the banking industry, it is the government’s decision to seize Fannie Mae and Freddie Mac in September 2008 that is likely to cost taxpayers the most money. So far the tab stands at $145.9 billion, and it grows with every foreclosure of a three-bedroom home with a two-car garage one hour from Phoenix. The Congressional Budget Office has predicted that the final bill could reach $389 billion.
Everyone keeps screaming about TARP, but at least some of that is getting paid back. Where’s the outrage over this ongoing debacle? And you know that if the CBO estimates the final cost will be around $400 billion, it will no doubt end up costing us closer to a trillion dollars.