Pilot government REO program in the works

With rumors of a real estate-owned property program being formed, through which the federal government would sell of its many of the homes it owns to investors for conversion into rental properties, CNBC reports the final touches are being made to the initiative by the White House.

With rumors of a real estate-owned property program being formed, through which the federal government would sell of its many of the homes it owns to investors for conversion into rental properties, CNBC reports the final touches are being made to the initiative by the White House.

According to the source, the government is determining the best course of action for unloading the REO properties. This analysis includes figuring out how pricing would work for sales to investors and how the government can work alongside the private sector to ensure the program runs smoothly.

"I think there is a fair amount of money in the wings waiting to buy, investors doing cash raises to buy properties on a large scale," Laurie Goodman of Amherst Securities told the news source.

One issue that could halt the initiative's commencement is scale. CNBC states many interested investors want to be able to purchase a substantial number of homes from the government at once.

Jaret Seiberg of Guggenheim Securities told the source, though, that large-scale investors aren't the only ones the government is looking to involve in the program. She states smaller national investors are expressing interest in taking some REOs from the public sector.



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