Federal housing officials have asked the public for advice on how to deal with the growing number of foreclosed homes it now owns. It has proposed that companies be allowed to buy foreclosure properties in bulk for a discounted price, rent them out affordably to the public and then return a share of the profit to the government. But this idea has been met with opposition, as we discussed in Part 1.

A South Florida real estate investor offered another perspective on the government's proposed plan, saying that it might be hard to find investors because even at a discount, foreclosure properties can be expensive to fix up and manage. He said that there likely wouldn't be enough coming in for both the investing company and the feds to share in the profits.

On the other hand, the federal government knows that while the market may be able to sustain the current amount of foreclosure properties, another explosion of foreclosures could come in after the lender processing problems are worked out and banks begin foreclosing at a higher rate again.

According to RealtyTrac, a California real estate research firm, there are around 1 million foreclosure actions that could have been filed this year but will be pushed to 2012 or later because of lender blunders. Ultimately, banks were accused of improperly "robo-signing" thousands of foreclosure documents and have now pulled in the reins as they work to correct the practices.

The new foreclosure cases, plus the backlog of cases are weighing heavily on the courts could be more than the consumer market can handle, they worry, so something must be done to prevent these homes for sitting vacant for too long.

Additionally, Freddie Mae and Freddie Mac, which were taken over by the federal government in 2008, are currently being supported by taxpayer money, so the sooner the two entities can become self-sustainable the sooner taxpayers can stop keeping them afloat.

If you would like to make a suggestion to federal housing officials on how to deal with the mounting foreclosure properties in Florida and the rest of the country, go to the Federal Housing Finance Agency website at www.fhfa.gov for more information. The deadline to submit ideas is Sept. 15.

Source: The Palm Beach Post, "Feds to be foreclosure landlords? U.S. seeks ideas; local real estate experts wary," Kimberly Miller, Aug. 13, 2011.