Beck Freaks Out Over Federal Proposal To Rent Foreclosed Homes: "That's Communal Housing"
Research ››› ››› DAVID SHERE
Glenn Beck attacked an Obama administration proposal to turn government-owned foreclosed homes into rental units as a path to "universal housing" and "communal housing," saying, "We're headed down a socialist road where they own everything." The proposal would encourage renting through bulk sales of federally owned property to investors or through joint ventures with the government -- an approach favored by many affordable housing advocates and investors.
Beck Rants About Rental Proposal, Says "They Don't Want Anybody Owning Anything"
Beck: Federal Government "Thinking" "Why Don't We Just Become Landlords. ... We Could Have Universal Housing." From The Glenn Beck Program:
BECK: I don't know if you saw, but President Obama is thinking about, you know, just a little idea, of being a landlord. Apparently -- now, who would have seen this coming? Who would have seen this coming? Apparently, the United States government, through Freddie and Fannie, own a lot of business and buildings and homes. And they've all been scooped up by the United States. And so now they're thinking about just, why not -- why don't we just become landlords?
Oh, my goodness. Maybe we could have universal housing. Wouldn't that be good? That'd be great. The government could just own all of our houses. Why didn't I think of -- I did think of that two years ago! I told you this is where we were headed, and here we are again. [Premiere Radio Networks, The Glenn Beck Program, 8/11/11]
Beck: Plan Is "Communal Housing. That's The United States Government Providing Equal Housing For Everybody. We're Headed Down A Socialist Road Where They Own Everything." From The Glenn Beck Program:
BECK: We're right now looking at a president who is talking about -- and let's not mince words here. He is now considering the federal government becoming a landlord and renting houses to the American people. That is a redistribution of wealth. That is -- that's communal housing. That's the United States government providing equal housing for everybody. We're headed down a socialist road where they own everything.
Why do you think Freddie and Fannie bought everything? Why do you think they're still encouraging banks to give risky loans. And go in -- mark my words. Go in and try to buy a house and tell the bank, "I don't want Freddie or Fannie involved in this at all." You can't do it. You can't do it. Why? Why? Because they don't want anybody owning anything, that's why. That's the real agenda.
Now, the argument's going to be, "Well, you going to have people living on the streets? Because you have the government have to give all this up, then it really crashes, then everybody has to live on the streets." What's the next president going to do? [Premiere Radio Networks, The Glenn Beck Program, 8/11/11]
Obama Admin. "Seeking Investors' Ideas" For Renting Out Homes Owned By Fannie Mae, Freddie Mac
WSJ: Admin. Considering Converting Foreclosed Properties Into Rental Homes. From The Wall Street Journal:
The Obama administration is seeking investors' ideas for turning thousands of foreclosed properties owned by government-backed entities into rental homes.
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, 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. [The Wall Street Journal, 8/10/11]
WSJ: One Proposal Is To "Sell" Government-Owned Properties "In Bulk To Investors That Agree To Rent Them Out." From The Wall Street Journal:
One proposal would sell packages of hundreds or thousands of foreclosed properties in bulk to investors that agree to rent them out. That approach is preferred by the Department of Housing and Urban Development, which is taking back properties as defaults mount on loans backed by the FHA. [The Wall Street Journal, 8/10/11]
WSJ: "Another Approach Would Let Investors Enter Joint Ventures With Fannie Or Freddie To Invest In A Pool Of Converted Rental Homes." From The Wall Street Journal:
Another approach would let investors enter joint ventures with Fannie or Freddie to invest in a pool of converted rental homes. A national property-management business would handle day-to-day landlord responsibilities. Investors would pay for rehabbing and maintaining properties and would share revenue from monthly rental income and the ultimate sale of the property. Such a joint venture would be modeled on the Resolution Trust Corp., which sold failed banks' assets in the early 1990s. [The Wall Street Journal, 8/10/11]
Many Investors And Advocates Have Praised Administration Proposal, Endorsed Similar Plans
WSJ: Mortgage Bankers Association Chief Executive: Plan Has "Extraordinary Value." From The Wall Street Journal:
The housing industry gave mixed reviews to the Obama administration's proposal to sell tens of thousands of foreclosed properties owned by government-backed entities and then convert them to rentals.
Some welcomed the administration's "request for information," published Wednesday to solicit views on proposals to convert foreclosures into rentals, because demand for rental properties is rising even as home prices decline.
Wednesday's solicitation was aimed primarily at investors. Putting homes "in the hands of people who can take care of them and rent them out" would stabilize prices sooner and save taxpayer money, said John Burns, the head of a home-building consulting firm in Irvine, Calif.
Mortgage titans Fannie Mae and Freddie Mac, together with the Federal Housing Administration, owned around 250,000 homes at the end of June. Another 850,000 homes are in some stage of foreclosure.
Solutions that rely on investors to clear the overhang of foreclosures have "extraordinary value," said David Stevens, chief executive of the Mortgage Bankers Association who until March served as the commissioner of the Federal Housing Administration. "Without question, in order to settle the markets and move the foreclosed inventory, we're going to need both owner-occupied and non-owner-occupied solutions," he said. "That means investors have to come in to participate." [The Wall Street Journal, 8/11/11]
National Community Reinvestment Coalition President: "Initiative Has The Potential To Solve A Fundamental Problem Facing The Housing Market Today." From a press release from the National Community Reinvestment Coalition, which says its mission is to "increase fair & equal access to credit, capital, and banking services/products for low- and moderate-income communities, because discrimination is illegal, unjust and detrimental to the economic growth of underserved communities in the United States and around the world":
The National Community Reinvestment Coalition (NCRC) today applauded the announcement by the Obama Administration of a developing plan to put vacant and abandoned properties owned by Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) back to productive use as affordable housing. John Taylor, President & CEO of NCRC, made this statement about the initiative:
"Some see the economy as a glass half full, others as a glass half empty. But the glass has a hole in the bottom of it, and that's the housing market. This measure helps seal the hole by putting back to productive use the glut of vacant and abandoned properties nationwide. We're impressed that they're looking for innovative solutions to ease this country's affordable rental housing and affordable homeownership crises."
"This initiative has the potential to solve a fundamental problem facing the housing market today. But it also creates opportunities to increase affordable housing and to create living wage jobs locally. Both problems are undermining the economy, and both require practical and aggressive solutions. We're glad that they're seeking the best ideas from the field, and we've offered our own ideas on how to prevent foreclosure through greater use of principal reductions, as well as ways to stabilize communities through this initiative. [National Community Reinvestment Coalition, 8/11/11]
Bloomberg Editorial: Administration Should Use Fannie And Freddie To "Fix The Housing Market"; "One Approach Would Be To Sell Foreclosed Properties To Institutional Investors." From Bloomberg:
The administration should urge Fannie and Freddie to recognize losses on the millions of troubled and defaulted loans sitting on their balance sheets. One approach would be to sell foreclosed properties to institutional investors. The two companies would then rent some of those foreclosed homes, both to ease the property oversupply and keep a lid on rental prices. (Rents are rising because of higher demand for rental units, now that many families don't qualify for a mortgage or don't want one.)
The mortgage-finance companies' regulator, the Federal Housing Finance Agency, would have to approve most of these changes, and Congress may need to get involved. The FHFA now forbids principal reductions on mortgages that Fannie and Freddie own, not wanting to condone anything that would reduce the value of their assets. But that's like saving a burning building while letting its contents go up in smoke.
By using Fannie and Freddie to help fix the housing market, the administration could strengthen the companies, too. In the long run, it may cost taxpayers less, and it would take a big weight off the recovery. [Bloomberg, 7/26/11]
Bloomberg: Morgan Stanley Report Argues For Bulk Sale Of Foreclosed Properties To Investors. From Bloomberg:
Encouraging investors to buy foreclosed homes in bulk would help shrink the U.S. housing surplus, stabilize property prices and provide affordable rentals, Morgan Stanley (MS) housing analysts said in a report today.
The collapse of the U.S. residential real estate market triggered the recession in 2007 and has stifled an economic recovery, according to the study. Incentives such as tax breaks and eased lending terms are needed to encourage more investors to purchase repossessed homes, repair them and rent the properties at affordable rates to people who can't afford to buy a house, analysts led by Oliver Chang wrote.
"What's important to do is help clear the backlog as quickly as possible with as little detriment to home prices as possible," Chang, head of housing strategy in Morgan Stanley's research division, said in a telephone interview. "The goal here isn't to help investors. The goal is to provide quality, affordable housing." [Bloomberg, 8/8/11]
Beck Has A History Of Speculating That Government Will Seize Land Through Fannie, Freddie
Beck: U.S. Government May Seize Land Through Fannie Mae And Freddie Mac To Back New Currency. From Glenn Beck:
BECK: So, conjecture on my part: How about we just print enough money to pay off the debt over time? Sure, I mean, it'll be worthless, but we'll be able to honor our agreement. We'll be able to give the Chinese their money back, and the rest of our debtors. That way, the people that we owed get their money, and if we sold some stuff to 'em, well, they can come and take those assets.
BECK: There's certainly enough land and resources in America that we could back our currency with. I mean, the government -- the government, though, would have to own all of the land - oh! Oh, my gosh, I just thought of something. Between Fannie and Freddie, the government already owns half of all of some of the U.S. mortgages, and they're about to buy more. And if you couple that with federal land and the grab for parks that they're doing now, and oh, did you hear, the polar bears are too crowded and endangered so they just gave, what was it, 200 square miles there of -- that's great.
Oh, and all the oil that we currently not drilling for and coal that we're not mining. Gosh, if you took all of that, I bet you could base a new currency off of that. Oh, and I bet China could come and help, because you probably wouldn't be happy with a system like that taking all the land because that's one of our real rights that we had in our Constitution. [Fox News, Glenn Beck, 10/28/09]
Beck: "The Government Will Own Your Home. ... Why Would They Need To Seize It? They Already Own It. They'll Just Call In The Loan." From The Glenn Beck Program:
BECK: I told you a few years ago, study Weimar. Study the Weimar Republic. How did the Weimar Republic get out of the situation that they were in? How did they do it? Their money was worthless. And so the federal government took all the property.
Well, this federal government doesn't have to take it; they'll already own it. They will already have it. The Weimar Republic had to go in and take it. Freddie and Fannie will own 95 percent of all mortgages in this country. The minute they devalue your property and give -- and make up that loan, who's that money going to? The banks aren't just going to devalue your loan. It sounds like a great thing. But you have to pay for it through taxes. We will pay for it. The tax dollars or the game that the federal government is doing by printing more money will pay for that debt.
In the end, it's not Freddie or Fannie, let's call it what it is: a government bank. The government will own your home. Why do they need to -- why would they need to seize it? They already own it. They'll just call in the loan. You won't be able to pay for it? That's fine. That's an asset on the balance sheet of the United States government. All of the property in the United States that they have through Freddie and Fannie. That's significant. [Premiere Radio Networks, The Glenn Beck Program, 8/10/10]
Beck Theory: Obama's Proposal To Limit Mortgage Interest Deduction Is Actually A "Land Grab" By The Feds. From The Glenn Beck Program:
BECK: Then he goes on to say that "hey, we also want to get rid of those mortgage deductions." May I ask you a question? Why in our wildest dreams would we do that now? You take away the mortgage deduction, who is going to buy a home? And by the way, who owns 99 percent of all new mortgages? Oh, that's right, Fannie and Freddie. If you default on those, who owns those properties? The United States government. This isn't a transfer of wealth; this is the biggest land grab in the history of the planet. The government is on the hook. You want to collapse the government? The only thing they'll have left to back the dollars with is -- oh my gosh -- land. Oh wow, that's what they did in Germany. When the mark was over, the Deutsche mark, they had to go to the German mark, and what did they do? They just backed the new money with the land that all of the national socialists grabbed. Oh, that's incredible. That is a coincidence, all of that is. So he wants to now, at this time, take away the mortgage deduction, which would take away the interest a lot of people would have because they couldn't write it off. They wouldn't be able to write off the interest. The interest. So who does that hurt? Oh, the interest, that hurts -- oh, that hurts the banks. The ones that the Fed is printing all the money for so they can have enough money so they're solvent. So if we can just stop getting people to buy mortgages, then they wouldn't have the interest payment to be able to make up for it, then the banks would collapse, and who would own all of their assets? Oh, that's right, the United States government. Do you see what's happening? [Premiere Radio Networks, The Glenn Beck Program, 4/14/11]