The Federal Reserve has 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 also said that lenders could receive Community Reinvestment Act credit for providing housing to low-income and moderate-income people by successfully converting foreclosed homes into rentals.
The policies could help encourage a nascent move to turn banks' foreclosure inventory into rental properties and then sell those homes to investors. The Fed earlier this year released a housing market white paper arguing that removing some of the barriers for converting foreclosures into rental properties could help stabilize the housing market.
Read the rest of the article at The Los Angeles Times
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