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…at least not yet.

On Sept 24th when the Google Blog announcement of Google Places was posted, there was no mention of Place Pages for Real Estate:

“A Place Page is a webpage for every place in the world, organizing all the relevant information about it. By every place, we really mean *every* place — there are Place Pages for businesses, points of interest, transit stations, neighborhoods, landmarks and cities all over the world.”

Notice they didn’t say “addresses” or “real estate listings”, but today over on SearchEngineLand,  there is a post by Matt Mcgee titled Google Builds out a National Real Estate Search Engine which features a “Real Estate Listing Place Page”, and several other outlets have picked up on it.

The Place Page that Matt uses as an example does indeed show that there are now Place Pages for listings that Google knows about via Google Base.

A closer look reveals that, at least at this point, this isn’t very different from what Google has done up to now.

The content on the example that Matt from SearchEngineLand used consists of photos from PrudentialProperties.com and redundant basic information from that site and two others.

As Real Estate listing pages go, its a hodgepodge with little added value, such as an AVM, or local market info, that you would find on a good IDX site for the same listing. Even Realtor.com’s basic listing page is better. If you want that detailed information Google, as it always has, provides the links back to the original real estate sites.

That makes this an extension of Google organic results, nothing more.

As a stand-alone listing detail page as opposed to the beefed-up search result page that it is, this “Real Estate Listing Place Page” is pretty half-assed by Google’s standards, which may be why Place Pages for real estate are currently hard to find.

I tried entering the address from Matt’s example in Google Maps, without putting the /realestate after the address, and was not offered the “more info” link that leads to the Place Page, even though we know it exists.

Then I tried entering the address on my new Droid (yes it rocks!) and, again, no real estate listing information was provided.

I also tried the address of a listing near me here in Newport RI — same thing, no link to a Place Page.

But when I tried the name of a business that operates on the street level of my building, Infant Interiors in Newport RI,  the “more info” link pops right up. I did not have to go to some sub-site of Google Maps, like /business, that no consumer has ever heard of.

And this is where it gets interesting, because Google provides business owners with a procedure for claiming and then editing information about their businesses right on the Place Page.

The “edit this place” link is conspicuously absent on the Real Estate listing Place Page.

Now HERE is the blueprint for how Google could, if they wanted to (and it is not clear that they do), make life miserable for NAR, local MLSes, Realtor.com, Trulia, franchise operated sites and IDX vendors.

Business owners who click on the “edit” link that is offered on Place Pages are taken to the “Local Business Center” — which is where you go if you want to correct information that often appears at the top of Google organic results:

OK, now let’s make this the first step in the Google MLS process:

1. This becomes “Edit my Property”
2. In addition to the address, this could summarize the asking price, basic details, and perhaps agent info if the property owner chooses to give an agent access to this profile in much the same way you can add users to a Google Analytics account.
3. This is the current validation scheme. Snail mail. Really, Google? Clearly, they could come up with something better and faster (SMS to a wireless # whose billing address matches the property perhaps?)

Notice that on the Place Page for Infant Interiors, people can add reviews, like the one I just wrote there.  If Google went this route for real estate, I doubt they would allow a homeowner, or agent, to have any control over the content anyone else adds, just like they aren’t giving the owner of Infant Interiors a way to delete bad reviews.

That is quite the opposite of the asinine opt out of 3rd party comments and AVM  that NAR just added to IDX policy, isn’t it?

What’s to stop Google from aggregating all the public data that Zillow or RPR use and adding that to the mix? Maybe they would just buy Zillow and be done with it.

Given that option, it’s easy to see how people, who are as distrustful of real estate agents as they have ever been in the wake of housing bubble, might migrate to a real estate information platform that is outside the industry’s control and has the added benefit of the familiar Google user experience.

When Google puts something like this out there, THEN its time to freak out if you are NAR, a local MLS, Move Inc, an IDX vendor, etc..

Until then, enjoy the borrowed time.

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Okay, a couple of things that this chart assumes:

• That from 1975 to 1999 was “normal” enough to indicate a statistical trend.   I think the case could be made that it was.
• That we’re going to eventually get back to that trend line.    I think a case could be made that we will.
• If both of those assumptions are indeed correct, then we’re heading into a scenario where we have quite an adjustment to go through in terms of a drop in peak housing values until we are back into range with that statistical trend.

What do you think?   Tell me why you think he’s wrong……

Tom Vanderwell

Values Have Dropped Only 25% of the Fall Needed to Reach Trend «

PRICE TRENDS / WAR OF THE WORLDS (Part 4): Property owners nationwide have lost only one dollar for every four dollars they can ultimately expect to lose on their home.

The good news according to the leading data series issued by the United States government is that prices have only fallen 6 percent. If you are a homeowner, you are wealthier than you knew. The bad news is you still have three dollars to lose for every one dollar which has already been lost.

The total projected fall from the Federal Housing Finance Agency (FHFA) “All Transactions Index”, which begins in 1975, shows a peak-to-trend fall of 27%. Since prices are 6% lower by this measure, prices must still fall an additional 23% from today for prices to revert to trend.

The assumption built into these estimates is that prices in the years 1975 to 1999 advanced at a typical rate. A trend line was generated to the present based upon that 25-year period. The chart depicts the divergence of the trend established from 1975 to 1999 and the actual prices recorded from 2000 to 2009.

The FHFA prediction of a total fall of 27% is far less than the total fall of between 49% to 60% predicted by Case-Shiller. Based upon the four data sets reviewed in the last few weeks (see summary below), we can estimate a total fall of between 27% to 60% from the bubble top to the long-term trend. The average of the four indexes projects a total fall of 41% from the bubble high to the trend bottom.

Looking ahead from today, the average of the four indexes predicts that property values will fall 26% from our current price levels.

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Reacting to John Rowles’ post, Jim Duncan has been talking about the RPR idea for years, and I read a little more about it today, having been tipped over the weekend by Tom Johnson. My take: Yawn.

RPR is not the generals fighting the last war, but the war before that. Apparently, the NAR still believes that the added value of real estate representation comes from hoarding data. RPR is their attempt to put a new fence around the data, having let the last set of barriers fall to Realtor.com and to IDX.

It’s twice funny to me, because not only is that war already well won — by the consumer — so is the true last war, the Battle of the Realty.bots. After all of this chatter, none of this shit has turned out to mean anything in real life.

I mean nothing. I’m convinced by now that no one who does not actually represent buyers and sellers has any clue about what is going on in the real estate market. We don’t search for listings — our clients do — and our position is stronger than ever. We post our listings wherever we can — and our position is stronger than ever.

I’m no friend to any restraint or restriction on trade, but buying or selling a home is a lot more complicated than it was four years ago. Our clients don’t need flashy web sites, they need agents who know how to navigate the shoals of the transaction.

RPR, MLS, VOW, IDX — all of this goes away when we do away with the co-broke. In the mean time, it’s deck chairs on the Titanic, at best, one more dipshit time-wasting “tool” to mask sales-call reluctance.

Notes for the grunts on the ground:

1. Motivated buyers and sellers will not go through a middleman in the early phases of their search. This is 1974-style thinking from the NAR.

2. Motivated buyers and sellers don’t care how they found you. They care about what they found: Do you know your shit? Can you deliver the product? Is your word any good?

3. Whether or not the information you have is better than the information they have is meaningless — to them — until they have resolved to rely on your judgment.

Ergo: There ain’t no substitute for salesmanship.

I’ll play with this toy when it comes around, but that’s because I’ll play with anything. My IDX software is the same as my MLS software (FlexMLS from FBS), and so my clients are searching from the exact same database I use. This is a huge marketing benefit, one that will not be easily replaced.

Even so, the notion of a national MLS is absurd, so it’s most likely purpose is not to re-enslave the data (impossible), but, rather, to attempt to re-enslave the agents. Even that objective would seem to be doomed to failure, but it’s another problem easily corrected by getting rid of the co-broke.

Meanwhile: I don’t care.

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I believe many Bloodhound readers will find this weekly radio program hosted by David Lykken of value. On this weeks show, Alice Alvey, Joe Farr and Tony Gallegos provide the inside scoop and up-to-the-minute information regarding interest rates, loan programs and “hot” industry news related to the mortgage industry specifically addressing the following topics:

• MBS and Market update
• Inflationary concerns
• Fed participation in secondary market
• Legislative updates
• Latest on RESPA and GFE…specifically addressing broker channel issues
• Update on FHA broker approval (mini-eagle) process…what is expected
• Credit risk…why underwriting is tightening and when is will contract

I hope you enjoy!

CLICK HERE TO LISTEN

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I attended the NAR convention in San Diego over the weekend and this banner caught my eye. It just seemed oddly Orwellian to me, as if NAR were subliminally planting the idea. As it turns out, that was not far from the truth.

The IDX rules have been updated to explicitly allow indexing by search engines, defeating the Indianapolis BoR’s attempt to use the old rules to prevent brokers and agents from using IDX data in SEO.

This time around, apparently, there was no parliamentary chicanery to delay the obvious. On the other hand, they did add an explicit opt-out for sellers who don’t want AVMs or third-party comments, or links to that content, associated with their listings.

It would be funny if it weren’t so frustrating: Obviously, they are aware that there is this technology called a “search engine” that makes it easy to find stuff, because they just endorsed a rule that acknowledges what the rest of the world figured out in 1995 — that search engines are useful.

Then they pivot and give sellers the right to censor information about their listings, but only on sites that use IDX data, meaning that those AVMs and third party comments are just a quick search away on sites like Zillow and Trulia. All this does is give people a reason to leave the broker or agent’s site to go and find the information they want on a site that is not bound by these idiotic rules.

Not that it will matter for much longer. With RPR, NAR itself is getting into the AVM game and, if you believe the nightmares of some local MLS directors, taking a concrete step towards a national MLS. If the reality matches the spin, they may be able to improve AVMs by adding information contributed by the membership, an idea they call the “Realtor Valuation Model”.

What’s missing is MLS data, at least for now. Done right, blending current and historical MLS data in with all the public data and combining that with an ability for brokers and agents to add their 2 cents would produce a much more accurate, and consistent, picture of real estate value, which means that MLSs have a choice to make: Play ball or don’t.

I’m fully aware of Greg’s opinion of NAR and its origins as a “criminal conspiracy against consumers” and he has a point, but if NAR has decided to hobble the ability of local MLSs to use their rule-making authority to fend off technology that they fear, then that is a good thing . As it stands, the end result of the current MLS system is the balkanization of real estate data and all these internecine squabbles like the MIBOR thing that do nothing to help brokers, agents, sellers or buyers.

Maybe, just maybe, the NAR has come to the conclusion that the MLSs, like the Sunnis in Anbar, need to make a choice — either you are with us or you are a terrorist. If you are with us, there will be benefits, if you are against us, not so much.

As Brian Boero points out, there are so many layers to this that, if it were an onion, it would be the size of Rush Limbaugh’s head, but one thing was obvious this weekend in San Diego and it was the extra padding that some of the MLS people had in their pants from the diaper they had to wear to prevent their loosened bowels from embarrassing them at the Reba concert.

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A clip from a fascinating City Journal article on the differences in taxes and services among the states and how that affects growth:

If California doesn’t want to be Texas, it must find a way to be a better California. The easy thing about being Texas is that the government has a great deal of control over the part of its package deal that attracts consumer-voters—it must merely keep taxes low. California, on the other hand, must deliver on the high benefits promised in its sales pitch. It won’t be enough for its state and local governments to spend a lot of money; they have to spend it efficiently and effectively.

The optimistic assessment is that things are going to get worse in California before they get better. The pessimistic assessment is that they’re going to get worse before they get much worse. As is often the case, hanging around with the pessimists is less fun but more instructive. The current recession has driven California’s state government into what amounts to a five-month budget cycle, according to Dan Walters of the Sacramento Bee. He estimates that the budget deal tortuously wrought in July should start falling apart in October, because it was predicated on pie-in-the-sky revenue estimates and because so many of its spending cuts are being challenged, often successfully, in the courts.

The recession will eventually end and California’s finances will improve, say the optimists. Given the state’s pervasive political bias against efficient and effective public services, however, the question is whether its finances will ever get truly well. States that have grown accustomed to thinking of the engine that drives their economies as an inexhaustible resource—whether it’s Michigan and the auto industry, New York and Wall Street, or California and the vision of the sunlit good life that used to attract new residents—find it tough to compete again for what they thought would be theirs forever, and to plan budgets for lean years that turn into lean decades. Instead, they invest their hopes in a deus ex machina that will rescue them from the hard choices they dread.

For California’s governmental-industrial complex, a new liberal administration and Congress in Washington offer plausible hope for a happy Hollywood ending. Federal aid will replace the dollars that California’s taxpayers, fed up with the state’s lousy benefits and high taxes, refuse to provide. Americans will continue to vote with their feet, either by leaving California or disdaining relocation there, but their votes won’t matter, at least in the short term. Under the coming bailout, the new 49ers—Americans in the other 49 states, that is—will be extended the privilege of paying California’s taxes. At least they won’t have to put up with its public services.

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In Gary Keller and Dave Jenks’ game changing book “The Millionaire Real Estate Agent”, the authors recommend a “33-Touch” follow-up system to stay top of mind with “mets”.

It was actually a brilliant idea - for Keller.  KW agents immediately began flooding the market with (expensive) calendars, post cards, and chotchkies - building the Keller Williams brand in the process.  While Century 21 squandered ad dollars sponsoring the MLB All Star Game and RE/Max floated its balloon on expensive and largely ineffective national TV ad buys, Keller Williams gained market share without spending a corporate dime.

Back in 2004, when the book was published, I felt strongly that 33 annual touches was too high a frequency for real estate professionals.  But that was before I started exploring social media.  Today, it’s very conceivable for a real estate agent to reach their database with 33 quality touches per year.  Below, I’ve mapped out a sample 33-touch program.

Postal Mail:  5 touches

Direct mail is relatively expensive when compared to some of the vehicles we’ll discuss below - but I still believe it should be a core component in any CRM campaign.  Of critical importance - your direct mail efforts need to look and feel as if they are “one-to-one” correspondences.  I have never preferred post cards and “newsletters” because they are clearly mass-mailing efforts.  We want your contacts to believe that you specifically thought of them when we reach them via direct mail.  Direct mail ideas:

• Birthday cards for the client and co-client
• Thanksgiving card (rather than the stale holiday card approach)
• Market updates (make these a mail-merged professional letter, not a bulk-mail blast)
• Announcements (invites to charity events, new hires, testimonials/case studies, etc)

E-mail:  12 touches

I’ve written a few articles about the trials and tribulations of email marketing on the Top of Mind Blog - all of which boil down to common sense.  Email is cheap and easy.  This low barrier to entry creates more and more emails being dumped into our inbox every day.  Clutter is a marketer’s worst enemy.  Your email correspondences must meet an extremely high bar in order to maintain readership and response over the long haul.  Here’s our email approach at Top of Mind - please note that our program is built for mortgage professionals, but I still think these principles could apply for real estate professionals:

• Quarterly Neighborhood Home Sales Reports (every 90 days we advise each contact on what homes sold within a 1/4 mile radius from their home)
• Quarterly Mortgage Checkups (advises each client how their mortgage is performing vs. market conditions)
• Beyond the Media (aims to debunk the doom and gloom consumers are bombarded with in the mainstream media, written quarterly)

Phone Calls:  4 touches

Most of us fail, myself included, to actually talk to our past clients frequently enough.  After all, it can be awkward calling a past client who is likely not in the market for our services.  But the beautiful thing about an effective CRM program is it gives us natural, compelling reasons to contact our database by phone.  For example, when you send a community real estate market update, you could simply select 30 clients to follow up with each time with a phone call.  Questions you might ask:

• Did you receive the letter/email?  (Heck, it’s important for us to ensure that our content is reaching the recipient and is being read!)
• Did you have any questions or concerns I might be able to address?
• Might you know anyone who I can help?  (Say, for example if you’ve written about the home-buyer tax credit.)

Web 2.0 - Facebook, Twitter, Linked In, Blogging:  12+ touches

Up to this point, we’re “only” at 21 touches/year… still a long way from Keller’s magic number.  Enter social media and blogging.  It’s virtually impossible to measure how often, say, a Facebook status update is read by a contact in your database… or a blog article.  And I certainly don’t mean to beat a dead horse here… but these vehicles absolutely “work”.  I laughed out loud this morning when I saw Geno’s Facebook entry about his Persian night out.  I know intimately how Brian Brady lives and dies with each Chase Utley at bat.  Above all, social media provides the ideal complement to traditional CRM vehicles because they allow us to connect on a personal level with our database - rather than just on a professional level.  I never liked this expression… but after all we are “buying brain cells” here.

The Glue That Holds Everything Together Is:

Content.  Always has been and always will be.  It’s not enough to “stay in front of” your database anymore.  The ultimate goal is to deepen relationships with your contacts.  Before you hit the send button on a campaign, ask yourself a few questions:

• Would I see value in this correspondence as a consumer or would I immediately hit the delete button?
• Is the correspondence about me or is it about the contact I’m sending it to?  What’s in it for the reader?
• Is this correspondence a “one-to-one” touch point?  Will the recipient believe that I thought of them specifically?

Today, the concept of “33 touches to your database” doesn’t seem so intimidating anymore.  Rather, the challenge becomes providing deeper, more compelling content than your competition.

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It’s cash-for-clunkers time in the real estate market.

Last week, in addition to extending the $8,000 first-time home-buyers tax credit for another six months, Congress added a new $6,500 tax-credit for move-up buyers.

The credit can be applied for homes selling for as much as $800,000, and the income limits exclude almost nobody.

You have to have lived in your home for more than five years out of the last eight, but that’s hardly an onerous restriction. And homeowners who have put down roots have equity.

Remember that capital gains on your primary residence are excluded from taxation if you have lived in your home for the past five years. But the way the government is spending money, that exclusion cannot last.

But, but, but… Your home isn’t worth what it was in December of 2005. That’s true, but it doesn’t change anything. The home that you can buy now was also selling for more four years ago.

Here’s the way things really shake out: If you have equity in your home, you can take that equity as a tax-free profit — for now. At the same time, you can snag the $6,500 tax credit. And you can do all of this at historic low interest rates.

If your house is worth $400,000 and you only paid $300,000 for it, you could reap a gain of $100,000 — which would save you thousands of dollars in taxes. If you wait for prices to go higher, you may wait a long time for a much smaller return. And the house you buy then will have appreciated, also.

I think we’re looking at a perfect storm for homeowners with equity: You can move now, take a tax-free gain, get a lot more house than you could have bought a few years ago, all financed with a low-interest mortgage. And then, next April, Uncle Sam will write you a big fat check for your trouble.

On second thought, this is less cash-for-clunkers than the taxpayer’s revenge…

 
Sell this idea! Feel free to share this idea with your clients and prospects — in your blog, by email, on the phone. This is big, and the more we talk about it, the bigger it will get. Yes, it’s insane, but for once the hardworking American people will be on the sunny side of insanity.

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More tomorrow…

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Can’t locate my muse but I’m working on it…

G

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Back in September I gave a lukewarm review of Google Voice.  Since September, it’s been working much better.  Much less lag, much better transcription quality.  I use it now on my business cards, website, and so forth, and it’s a great tool to help screen calls that come in.

Google Voice is a free, invitation-only service.  They recently gave me two invitations that I can give to the first two people who contact me at bhb@chetson.com.  I believe you need to use GMail as your webmail provider in order to take full advantage of Google Voice.  The two services work together.

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This from my Arizona Republic real estate column:

The elections this past Tuesday were not a referendum on President Barrack Obama or his plans and policies. How do we know that? Because everyone associated with the Obama administration loudly insists that this cannot be so. They ought to know, right?

Senators and Representatives from states and districts that supported John McCain in the last election might have second thoughts, though, and this is very far from being a bad thing.

Americans insist to each other that they want a government that gets things done — except when they happen to be suffering under a government that is getting things done. If this election was not a referendum on Obama, it was a loud, angry shout about what the government has been doing lately.

The last time voters repudiated an over-ambitious president — the last six years of the Clinton administration — the nation experienced a period of tremendous growth and prosperity. The American people recoiled in horror from socialized medicine, and the resulting government — liberal president, conservative congress — was amazingly beneficial for the American people.

How? By getting nothing done, that’s how.

For free markets to work at their best, entrepreneurs need to be able to plan for the future. If they can surmise that prices and credit terms will not swing wildly over the next few years, they can plan their investments with a sense of security.

And if not? Not.

The Obama administration’s herky-jerky dance of currency inflation, stimulus programs, emergency bailouts and tax credits not only cannot stabilize the economy, they do exactly the opposite: They convince entrepreneurs that now is not a safe time to make plans for the future.

This goes for the real estate market, too. Buyers sit on the sidelines waiting for new tax credits. Sellers live in dread of future interest rate hikes. The Cap and Trade bill promises to complicate life for every homeowner.

So how might these elections have helped us all? It’s simple. If Senators and Representatives are afraid to act, nothing will change. And when nothing changes in Washington, everything changes, usually for the better, for everyone else.

Steal this book: I’ve written over 200 of these real estate columns. They are consistently one of the most popular features on our blogs. Many of them are dated and/or entirely Phoenixocentric. But many others are timeless and generic. If you want to use any of my columns on your weblog or web site, feel free. Three rules: Don’t change my text, credit me as the author and give me a link back to http://www.bloodhoundrealty.com/ with appropriate anchor text. Something like this, perhaps:

<a href="http://www.bloodhoundrealty.com/" target="_blank">
Phoenix Realtor Greg Swann</a> suggested I share this with you:

Am I link-baiting? You bet. The quid pro quo is free content for your site that pulls eyeballs and excites interest.

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I think it should be obvious by our lack of self-promotion, but we ended up not putting anything together for BloodhoundBlog Unchained in San Diego. I can’t speak for Brian, but I’ve been wall-to-wall with work for months, and I haven’t had time for anything else.

I’ll go through the PayPal records tonight to make sure everyone’s money is refunded.

Meanwhile: If you see any NAR grand poobahs, be sure to kick ‘em in the shins for shifting all your November move-ups into December. Christmas may be good, Thanksgiving not so much…

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The Washington Post:

Under the housing program, people seeking to own a home for the first time in three years would receive an $8,000 tax credit if they sign a contract by April 30 and close on it by June 30. Current homeowners who are buying a new primary residence would be eligible for a $6,500 tax credit starting Dec. 1 if they owned their home for five consecutive years in the previous eight.

The timing is more lenient for military families who have been deployed overseas for 90 days or more in 2008 or 2009. They would have until April 30, 2011 to sign a contract.

But the measure limits the purchase price of the home to $800,000. It also imposes income caps so that people who make more than $125,000 annually and couples who make more than $225,000 would not be eligible for a refund. Anyone who collects the tax credit but sells their home within three years of buying it must return the refund.

The program is estimated to cost $10.8 billion.

The passage of the tax credit provision was a huge win for the real estate industry, which has been lobbying aggressively to extend and expand the program. They say the tax credit has helped boost sales and clear out a glut of lower-priced homes, especially foreclosures, and that ending it would be a blow to the housing market’s recovery.

But critics of the program, including some economists, say the program is far too expensive. They say that most people who used it would have bought homes anyway. They attribute the uptick in home sales in recent months more to low prices and record low interest rates.

Questions for the lenders: The tax credit for move-ups doesn’t commence until 12/01/09. What about first-timers? Can they be under contract now, or do they need to wait until after the end of the month.

More: Do I read this right? Can you “move up” after having rented for the last three years?

I hate this, of course. The real estate market can’t shake out if we won’t let it. But as listers of higher-end homes… Thus does the legislature make whores of us all.

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Yahoo News:

Can’t pay the mortgage? You still might be able to stay in your home. Government-controlled mortgage company Fannie Mae is going to give borrowers on the verge of foreclosure the option of renting their homes for a year.

The change announced Thursday could give a temporary break to thousands of homeowners, but critics question whether it will only add to the mushrooming losses at the company, which has received billions in taxpayer money.

The new “Deed for Lease” program will allow homeowners to transfer title to Fannie Mae and sign a one-year lease, with potential month-to-month extensions after that. It also helps save money because the lender does not need to complete the often lengthy and time-consuming foreclosure process.

The program helps “eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities,” Jay Ryan, a Fannie Mae vice president, said in a statement.

It also does less harm to the borrower’s credit record.

“It shows that you put your best effort to work out a solution,” said Gabe Del Rio, director of homeownership at Community HousingWorks of San Diego.

However, Mike Himes, director of homeownership services at NeighborWorks Sacramento, said the industry should push harder to modify loans at lower monthly payments. “The preferred option is allowing people to retain ownership,” he said.

Fannie Mae executives said the rental program is designed to help delinquent homeowners who don’t qualify for a loan modification, but still want to stay in their homes.

To qualify, homeowners have to live in the home as the primary residence and prove that they can afford the market rent, which will be established by the management company running the program. Rents are based on current market rates.

The plan is expected to be particularly attractive in places like Phoenix or Orange County, Calif., where homeowners are stuck paying large mortgage bills on properties that are now worth far less than they originally paid. At the same time, rents have been falling in those areas and homeowners may find they are paying far less to live in their home.

In Orange County, for example, the average monthly rent for all apartments was about $1,450 in September, down nearly 8 percent from a year earlier, according to research firm MPF Research. In Phoenix, the average renter paid about $720, also down about 8 percent from last year.

Still, based on a similar program, the effort is likely to attract a relatively small number of homeowners.

In the first nine months of the year, Fannie Mae took ownership of nearly 2,000 properties through a process known as a deed-in-lieu of foreclosure. That pales in comparison to the 90,000 foreclosed properties the company repossessed in the period.

Deed-in-lieu works like the new program, allowing homeowners to turn over title to Fannie Mae, but rather than renting, the owners simply walk away.

While Fannie Mae executives say the company’s motives are community-minded, critics say the company is simply gambling that the properties will eventually sell for a higher price. That’s folly, says Peter Schiff, president of Euro Pacific Capital in Darien, Conn., and a longtime bearish investor.

“Taxpayers are now going to own all these houses that (Fannie Mae) should have unloaded,” he said. “It’s going to cost a fortune.”

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