NPR ran a very interesting story about Fannie Mae, the government-sponsored enterprise that was supposed to support stable, affordable housing markets in the United States. Fannie Mae itself became unstable during the economic crash in 2008. Since Fannie Mae went into conservatorship in September 2008, taxpayers have supported it to the tune of a mind-boggling $86 billion.
What’s interesting about the NPR story is not the crushing cost of Fannie Mae — that sad story has been known for years — but the continuing costs imposed by the fact that Fannie Mae is the largest owner of foreclosed properties in America. Fannie Mae owns a stunning 153,000 foreclosed homes, which means that it must pay to mow the yards, trim the shrubs, paint the exteriors, and engage in the other upkeep costs that normally would be borne by homeowners. NPR estimates that Fannie Mae pays more than $36 million a year just in lawnmowing fees. Fannie Mae also is generally considered to be the largest purchaser of paint and general appliances in America. Of course, people in the neighborhoods where the foreclosed properties are located are counting on Fannie Mae to spend what is necessary to keep the places from becoming rundown hellholes that destroy neighborhood property values. And, our government being what it is, one wonders how Fannie Mae decides whom to hire for all of the lawnmowing and home upkeep jobs for those many distressed properties.
Fannie Mae’s efforts clearly contributed to the housing bubble, and now those efforts leave us in the absurd position where the federal government is saddled with unwanted properties that will impose costs for years. Our approach to government clearly has taken a wrong turn when a program, however well-intentioned, leaves our federal government owning more than 150,000 private residences and being the largest customer for home fix-up products and services in the country.
Webner House 