Fed Governor: Turn REOs into Rentals

Federal Reserve Governor Elizabeth Duke, speaking at a conference on vacant housing, called for more alternatives for the disposal of REO properties besides traditional homeownership.

She advocated considering increased rental housing, lease-purchase deals, and converting foreclosed owners to renters.

"Homeownership, long promoted by federal policy and facilitated by local housing organizations, cannot and should not be the only alternative to REO properties," Duke said. "Even in the best of times, homeownership limits mobility in the labor market."

Source: Reuters News (09/01/2010)