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Ideas for foreclosed properties, underwater owners

What should the federal government do to address the inventory of foreclosed properties?

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More foreclosed properties should be made available for rental opportunities.  It’s a risky business that requires the involvement of seasoned professionals, many of which have arisen through the NSP process.  FHA should also develop a Multifamily Rental product that supports the aggregation and successful financing and operation of such properties.

Owners who are “underwater” on their mortgages should be offered an opportunity to convert to a servicing first mortgage that matches the market value of their homes, with a non-servicing second mortgage for the remaining balance that is shared between the lender/investors and the borrower upon sale. Ocwen Financial has pioneered such a “Shared Appreciation Modification” that could serve as a model.

Conrad Egan is Senior Advisor for the Affordable Housing Institute

Welcome to the BPC Housing Commission expert forum! This forum is intended to foster interactive and substantive discussion about pressing housing issues. Each month contributors from different parts of the housing sector will be invited to respond to a discussion topic. Guest posts will feature prominently on BPC’s website, as well as be shared regularly with Housing Commissioners to help inform their work.

Have a pressing question you’d like us to consider? Please leave it in the comments section. We encourage you and our expert bloggers to add comments, contributing to the national dialogue on solutions for the future of the housing sector.

Expert bloggers are not members of the BPC Housing Commission. Any views expressed on this forum do not necessarily represent the views of the Housing Commission, its Co-Chairs, or the Bipartisan Policy Center.

2012-01-20 00:00:00

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