Government Wants to Turn Foreclosures into Rentals?
CNN Money recently posted an article explaining the government’s hope to launch a pilot program to turn government owned foreclosures into rentals properties.
The program, cited by Federal Reserve Chairman Ben Bernanke, would sell foreclosed homes currently owned by Frannie Mae and Freddie Mac in bulk to investors, who would then turn them into rentals.
With foreclosed homes selling well below market values, they have had a significant effect on the housing crisis and according to Lender Processing Services, there are close to an additional 2 million homes in the late stages of delinquency.
“I think a program like this could have a significant impact on the real estate market”, stated Real Estate Attorney and partner John Rothamel. “This initiative will remove foreclosed homes from the active inventory, which will help preserve appraised values within communities.” In addition, “it offers an answer for the homeowners who are being displaced as a result of their foreclosure and are looking for alternate housing”. “If rolled out effectively, Bernake’s proposal could kill two birds with one stone and begin moving the real estate market into recovery.”
As reported in the CNN Money article, the agency is not releasing details on how the rental program will work, but is saying it is “proceeding prudently but with a sense of urgency to lay the groundwork for the development of good initial transactions in early 2012.”
Read the full article posted by CNN Money here.
