The Federal Reserve outlined the rules banks must follow in order to rent out foreclosed homes in an effort to aid recovery in the housing market.
In the six page policy statement the Federal Reserve said it would permit banks to rent out foreclosed properties to tenants. Banks that offer the properties as rentals would not have to demonstrate “continuous active marketing of the property provided that suitable policies and procedures are followed.”
The Fed said that banks that chose to rent out foreclosed homes should develop detailed policies for renting out these properties, including a way to determine if the homes are safe for occupancy and complying with local building codes.
Many at the Fed have argued that renting out foreclosed homes is one way to curb the decline in housing prices which has dropped 30 percent since 2006 at the housing market peak.
Banks have been repeatedly under fire for their mishandling of foreclosure documents, which caused many people, who did not have expert foreclosure attorneys, to be wrongfully evicted. Big banks have been recently accused of failing to maintain foreclosed homes in low-income and minority neighborhoods.
When a person receives a default notice on their mortgage they are advised to contact a foreclosure lawyer to determine if they can avoid losing their homes. There are a few courses of action a homeowner can take to prevent eviction which a foreclosure attorney can outline and handle on their behalf.