Fannie Mae renting out foreclosed homes.
I’m happy to see the news that Fannie Mae will be allowing renters to continue to rent homes that have been foreclosed on. But I think it’ll be better if this is expanded to include renting back owner-occupied homes, too. It seems to me that this is just smart business—I imagine most lenders would be smart to establish this. They foreclose on a $300k house because the owner can only swing $1,500 of the $1,800 monthly mortgage, so the bank goes from making $1,500 to $0, plus they’ve got themselves a vacant dwelling, which is trouble. Better to convert the house into a rental, so that its occupants can continue to live there. This would be a boon for existing property management firms, or an opportunity for lenders to buy or establish property management groups of their own. With the caveat that I don’t know anything about potential tax benefits of a lender taking ownership of distressed property and then idling it, this approach seems like a win/win.