Thanks to “extraordinary market conditions” the Federal Reserve officially approved banks’ strategy to rent out foreclosed homes yesterday, the Wall Street Journal reported. Outside those conditions, lenders have to demonstrate a legitimate effort to sell repossessed properties. But recognizing the state of the rental market and the sales market, the Fed and banks have been strategizing for months on how to rent out the bevy of foreclosures backlogging the market.
Now, the Fed wants banks to establish detailed policy for ensuring the properties they rent out are safe and satisfy local building codes. Further, banks need to find a uniform way to determine which properties are picked to be rented out and to describe the conditions under which such a program would be successful. [WSJ]