A lot of times investors are llc’s or reit’s, meaning it’s a company name buying the house. If it’s an individual wanting to buy a single rental, then their other loan will show up on their credit report and they will have some splaining to do.
I’m sure a few people will pull it off but for the most part, the waiters and savers will get first crack at the repos, instead of the other way around. For months we’ve been hearing stories of people getting their offers overlooked, often times for a similar or lower offer from a cash investor, that is which they are looking to change and it’s a good thing.
Plus there will be addendums to the purchase contract that I’m guessing will list some warnings about defrauding the government and the penalties. Anyone can cheat on their taxes too, but most don’t because most white collar folk would prefer to steer clear of the pokey.
Since it seems that every idea or program coming from the fed has been making the problem worse, at least this one makes it better or does no harm at the very least. Since fannie/freddie has their hands in a good chunk of the potential repos, this could be one of those political feel good stories that they declare a success and expand upon, perhaps even mandate to others. It is also the first thing I’ve seen where it will be in their best interest to hurry up foreclosures to get families in the houses, who will spend money on them and pay taxes, something they also like.
Maybe it does nothing, but I’m guessing it ends up helping the piggington agenda.
