Fed releases rules for foreclosure-to-rental program

The guidelines for the conversion of real estate owned homes into rental properties were released by the Federal Reserve last week, the Los Angeles Times reported. The central bank decreed that lenders could receive Community Reinvestment Act credit under the new policy. The Community Reinvestment Act, enacted in 1977, was intended to encourage lenders to provide housing to low- and moderate-income people.

Hedge funds and private equity firms are already tripping all over themselves to invest in newly converted REO properties, the paper said. [LAT]