A new report predicts the market for foreclosed homes that are turned into rentals will be worth more than $100 billion this year.
Rents are on the rise as home prices fall. That has policymakers promoting the idea that selling foreclosed homes to investors as rentals could be a positive for the housing market -- helping take down the inventory of distressed properties and putting a floor on prices.
Last week, the Federal Reserve released guidelines that could encourage the practice of converting lender-owned foreclosed homes into rental properties.
By converting foreclosures to rentals with steady cash flow, banks could reduce the number of their "substandard assets," a classification used by banking regulators to determine the health of banks.
The central bank also said that lenders could receive Community Reinvestment Act credit for providing housing to low- and moderate-income people by successfully converting foreclosed homes into rentals.