Chairman Bernanke of the Fed has proposed that REOs be converted into rentals.
He believes thatÂ REO-to-rental programs has some potential for success. In a recent speech at the 2012 National Association of Homebuilders show he said:"As of early November 2011, about 60 metropolitan areas each had at least 250 REO properties for sale by the GSEs and the FHA--a scale that could be large enough to realize efficiency gains.Â
Â Atlanta has the largest number of REO properties for sale by these institutions, with about 5,000 units. The next-largest inventories are in the metropolitan areas of Chicago; Detroit; Phoenix; Riverside, California; and Las Vegas, each of which have between 2,000 and 3,000 units. As I noted, not all REO properties are appropriate for rental, but many do appear to be physically adequate and potentially attractive to tenants. The number of properties suitable for rental is bound to increase, as the number of properties currently in the foreclosure process is more than four times the number of properties in the REO inventory."
This could be a positive factor contributing to the recovery of the housing markets. Especially in the metro cities that are noted in the report.Â
Here is the complete speech:http://www.federalreserve.gov/newsevents/speech/bernanke20110210a.htm
Here is a copy of the white paper:http://www.buyhomeinus.com/wp-content/uploads/2012/01/housing-white-paper-20120104.pdf