In a new policy decision; Fannie Mae has decided to allow qualified renters stay in homes; which have been foreclosed on and which Fannie Mae now owns. These renters; who normally would have been evicted; will be allowed to stay, paying a "market rate" rent on a month to month basis. Once a buyer is found for the home; the renter would then be forced to vacant.
Of course if a smart investor is buying the foreclosed property - he would have an investment property complete with a tenant already occupying the property.
Renters have been some of the biggest victims in the foreclosure mess. These are people who have been paying their rent to the landlords/home owners and the home owners have not been paying the mortgage. Many times these renters have no clue the home is even in threat of foreclosure until it's too late. This new policy will help thousands of renters across the country.
I can already see issues arising in this new policy however. While it is certainly a help to helpless renters (and overall the right thing to do) - most every Real Estate professional in the world will tell you that an uncooperative tenant can make it VERY difficult to sell the property.
See: Story CNBC Inman News
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James, I agree that if an investor is the one buying the home, why not keep the tenant in place. Apparently they can pay their rent and you already have the built in cash cow.