Reuters: Economic News: Fed delivers policy reminder on foreclosure-to-rental rules

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Fed delivers policy reminder on foreclosure-to-rental rules Apr 5th 2012, 20:11 Tweet Share this Email Print Related News Insight: Bank stampede keeps Spanish real estate on the ropes 5:42am EDT What if you can't sell your home? Wed, Apr 4 2012 Vacation homes beckon to bargain shoppers Wed, Apr 4 2012 Cut-rate mansions anyone? Hamptons real estate recovering Wed, Apr 4 2012 Federal Reserve tones down talk of more stimulus Tue, Apr 3 2012 Analysis & Opinion Fed policy, University of San Diego style Spanish bank take-under reveals real estate mess The Federal Reserve Building stands in Washington April 3, 2012. Credit: Reuters/Joshua Roberts WASHINGTON | Thu Apr 5, 2012 4:11pm EDT WASHINGTON (Reuters) - The Federal Reserve on Thursday issued a policy reminder to banks that are turning foreclosed homes into rentals, and outlined existing guidelines which must be followed in dealing with the growing number of distressed residential properties on the market. "Banking organizations should make good-faith efforts to dispose of foreclosed properties," the Fed said in a statement. In light of "extraordinary market conditions," the Fed said that renting out those surrendered properties falls in line with bank regulations on bank-owned foreclosed properties. Many at the Fed have said creating more single-family rental properties could possibly curb declines in home prices that have fallen more than 30 percent from their peak in 2006. The Fed has also said lenders jumping into the rental market could reduce losses on foreclosed properties due to the growing demand for rental housing seen in many real-estate markets. (Reporting by Margaret Chadbourn, Editing by Gary Crosse) Tweet this Link this Share this Digg this Email Reprints Comments (0) This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

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