The Beat Goes On for Own-To-Rent

Felix Salmon is keeping up the drumbeat for Own-To-Rent. In case you missed the previous posts from me on this bad idea (here and here) are the links.

Felix notes that there’s already been a bill introduced by Rep. Raul Grijalva. If you click through you will see that the bill has been gathering dust for about two months — the PR piece from Rep. Grijalva is dated May 22.

In addition to forcing investors who end up taking back homes into becoming long-term landlords, Felix would also like to see renters protected. In other words if you rent a house from someone who loses their house to the bank, you get to stay. Too bad if the bank would prefer not to be in the rental business.

Yeah, I know the bank can sell the house if they want to, they just can’t kick out the occupant. As I said before, this eliminates the entire universe of buyers that are looking for a house to live in. The only potential buyers by definition would be investors who are sure to beat the prices down further as they realize how little competition there is for these properties.

Creating a sea of rental homes is no solution. The solution is to clear the market via modification when it works and foreclosure and resale to any buyer when the modification approach fails.

About Tom Lindmark 401 Articles

I’m not sure that credentials mean much when it comes to writing about things but people seem to want to see them, so briefly here are mine. I have an undergraduate degree in economics from an undistinguished Midwestern university and masters in international business from an equally undistinguished Southwestern University. I spent a number of years working for large banks lending to lots of different industries. For the past few years, I’ve been engaged in real estate finance – primarily for commercial projects. Like a lot of other finance guys, I’m looking for a job at this point in time.

Given all of that, I suggest that you take what I write with the appropriate grain of salt. I try and figure out what’s behind the news but suspect that I’m often delusional. Nevertheless, I keep throwing things out there and occasionally it sticks. I do read the comments that readers leave and to the extent I can reply to them. I also reply to all emails so feel free to contact me if you want to discuss something at more length. Oh, I also have a very thick skin, so if you disagree feel free to say so.

Enjoy what I write and let me know when I’m off base – I probably won’t agree with you but don’t be shy.

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