Loading…
Thursday, September 18, 2014
Current Weather
Loading Current Weather....
Published: Sunday, 5/6/2012 - Updated: 2 years ago

Turning foreclosures into rentals promoted

LOS ANGELES TIMES

LOS ANGELES -- A recent report predicts the market for foreclosed homes that are turned into rentals will be worth more than $100 billion this year.

Rents are on the rise as home prices fall. That has policymakers promoting the idea that selling foreclosed homes to investors as rentals could be a positive for the housing market -- helping take down the inventory of distressed properties and putting a floor on prices.

Last month, the Federal Reserve released guidelines that could encourage the practice of converting lender-owned foreclosed homes into rental properties. By converting foreclosures to rentals with steady cash flow, banks could reduce the number of their "substandard assets," a classification used by banking regulators to determine the health of banks.

The central bank said that lenders could receive Community Reinvestment Act credit for providing housing to low-income and moderate-income people by converting foreclosed homes into rentals.

As Los Angeles real estate agent Leo Nordine recently said, "There are so many investors buying right now it's insane."



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.

Related stories