Washington has issued a plea to the public for ideas on how to get rid of houses For sale or rent by distressed owner: 248,000 homes. That's how many residential properties the U.S. government now has in its possession, the result of record numbers of people defaulting on government-backed mortgages. Washington is sitting on nearly a third of the nation's 800,000 repossessed houses, making the U.S. taxpayer the largest owner of foreclosed properties. With even more homes moving toward default, Fannie Mae, Freddie Mac and the Federal Housing Administration are looking for a way to unload them without swamping the already depressed real estate market. Trouble is, they haven't figured out how to do that. The government admitted as much in August, when Fannie, Freddie and FHA issued a joint plea to the public for ideas about how to solve the problem. (Give it your best shot: You have until Sept. 15 to email ideas to reo.rfi@fhfa.gov.) "They're stuck," says Karen Shaw Petrou, managing partner of Federal Financial Analytics, a Washington-based consultant that advises banks and other clients on government policy. "They don't know what to do." Since the 2008 financial collapse, the government has spent billions of dollars trying to extricate borrowers from high-cost loans, aid delinquent homeowners and stabilize neighborhoods. The results have been disappointing. The Obama Administration's signature loan-modification program has helped about 657,000 homeowners - far short of its goal of 3 to 4 million. The program was a victim of its complexity and its inability to cope with overwhelming demand. Many families hit hardest by the housing downturn are concentrated in states that are having the most difficulty recovering from the recession, including Florida, Ohio and Nevada.
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