Ranieri, Rosen note advantages of renting REO properties

| March 13, 2012 More

The federal initiative to sell REO properties in bulk and convert them into rentals has gained the support of Lewis Ranieri, a housing finance expert credited with a major role in creating the mortgage-backed security.

Ranieri, together with University of California economist Kenneth Rosen, wrote a paper outlining the possible advantages of converting REO homes to rentals and of government involvement in that effort.

According to the paper, the impact will vary by location and be most beneficial if bulk sales are focused in specific metropolitan areas, such as those which have both strong fundamentals for rental properties and a large number of foreclosed homes. This should improve investors’ ability to participate effectively and maximize the effect on the housing market.

This could benefit the economy by decreasing the unused inventory of homes, meeting rental demand, stabilizing home prices and increasing economic activity, the pair said. Owners may need hep with financing that government involvement can help provide, although the two list involving competent rental management as the first concern to ensure success.

Investors who wish to hold the properties for a limited time may be able to dispose of them through a rent-to-own agreement with tenants, by reselling them to larger investors and public companies or through a sale to owner-occupants once the market improves, the report notes. For those who assemble enough properties and leases, other options may be available.

Tags: , , , , , ,

Category: Rental Health Index (now called RPI Score), Rental Property Management

Comments (1)

Trackback URL | Comments RSS Feed

  1. Sheila says:

    Different states are ediferfnt. Most people don’t know for example that in Colorado law CRS 38-38-101 and thereafter, MERS is never named, but in the definitions for that real estate foreclosure section of the law the term “holder” needed for standing to foreclose, is defined to specifically exclude electronic registries who do not have other specific grants of authority. Yet just this week I saw MERS named as beneficiary on a current public trustee foreclosure filing. While within another file it acually quoted the definition I just mentioned, and claimed to be within that definition as part of their submission to the public trustee.search by name “(name your own state) statute Foreclosure” and start reading, laws are called statutes as you search. First, Read to get familiar, and re-read a few more times for understanding. Even read the definitions, that’s where I found the gem about electronic registries even though it never named MERS by name. I would never have thought to search for it yet I was able to find it.

Find a Property Manager