The Federal Reserve has called on lawmakers to help with the ailing housing market. The Fed gave lawmakers the task of instilling more aggressive actions to prevent home values from plummeting further. Suggestions within this new surge include an idea that a government program may start renting out single-family homes in foreclosure. An REO rental program by the government-sponsored enterprises may cost mortgage servicers and bond investors; the it is the benefits in the long run that need to be weighed.
"Some actions that cause greater losses to be sustained by the GSE in the near term might be in the interest of taxpayers to pursue if those actions result in a quicker and more vigorous economic recovery."
Furthermore, renting out some of Fannie Mae’s REO inventory could end in a better loss recovery than selling the property. Purhaps this is the way to create a more stable housing market bubble.
Hart Real Estate Solutions