Taxpayers pay millions to mow lawns of foreclosed homes

Jonathan Karl, Richard Coolidge & Sherisse Pham
Power Players

Spinners and Winners

American taxpayers own close to 200,000 vacant houses, and over the next year they will spend more than $40 million just to mow lawns at these properties. Taxpayers also foot the bills to paint walls, fix cabinets, plant flowers and more -- expenses that just last year, exceeded a half a billion dollars.

The housing bailout has already cost taxpayers $124 million, now Americans are spending hundreds of millions more fixing up foreclosed homes to try and sell them. It is a bizarre and expensive side effect of the housing market collapse and failure of Fannie Mae and Freddie Mac, the mortgage giants that went into federal conservatorship in 2008.

Fannie Mae alone repaired nearly 90,000 homes last year.

"That is a lot of homes, and it is a lot of materials that need to be purchased," said Jay Ryan, Fannie Mae's vice president of real estate owned homes.

Ultimately, Ryan said, Fannie Mae pays electricity bills, property taxes, and the costs of general upkeep of properties to make sure houses are ready to sell. Fannie Mae and Freddie Mac have already sold hundreds of thousands of homes, but they continue to foreclose on thousands more every month. Real estate experts say getting rid of all of them is not going to happen any time soon.

"We've got to get the government out of the housing market, the mortgage market," said Guy Cecala, CEO and publisher of Inside Mortgage Finance Publications. "That's very difficult to do when the housing market is on its knees.

Fannie Mae says fixing the houses and maintaining them will ultimately save taxpayers money, because they will yield higher prices in the marketplace. But in the meantime, we've got a lot of yard work to do.