Fed Backs Banks' Renting Out Foreclosed Homes

Law360, New York (April 5, 2012, 8:06 PM EDT) -- In an effort to target market conditions that are depressing housing prices nationwide, the Federal Reserve on Thursday said banks could rent out foreclosed homes without simultaneously trying to sell the properties.

In explaining its move, the Fed pointed to a pair of problems in housing: a glut of distressed residential properties and spiking costs for in-demand rentals.

Though lenders should make good-faith efforts to resell foreclosures, banks can turn them into rentals "without having to demonstrate continuous active marketing of the property, provided that suitable...
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