According to The Street the Obama Administration is going to be announcing a new program that will sell government owned foreclosures to investors as rentals. The goal is to reduce the foreclosure supply in the market which in turn will hopefully encourage housing prices in those cities to rise and will also capitalize on the demand for rental homes.
While statistics show that banks repossessed less homes in 2011 than they did in 2010 that number is apparently misleading and is distorted because of foreclosure processing delays. There has been a recent spike in default filings which leads to speculation that there will be more foreclosures in 2012.
The Fed has been pushing for a foreclosure to rental plan for some time so this new proposal seems to be in line with the government’s thinking.
Right now the Federal Reserve, Treasury and HUD have been working with Fannie Mae and Freddie Mac to iron out the details of this agreement so there is a plan which works for everyone, but there has never been such a plan in the past so a lot of work has to be done to begin implementation. The government has not set any target date for rolling out a foreclosure to rent program and still needs to do some testing so it could be quite a while before we see any changes, unfortunately too late for most people who are facing foreclosure today.