Sunday, September 02, 2007

An Interesting Idea from Andrew Samwick and Dean Baker

Allow those who defaulted stay in their homes at fair market rent. Only houses at less than median value would qualify. This is an interesting idea. I'll need to think it through at greater length...

1 comment:

Elvis.Jim said...

This is taking defaulted loans and converting them into an equity interest in the properties.

One problem with this approach is the management intensive nature of single-family assets. While there are a number of multi-family REITs and it's estimated that a large portion of the rental universe is single-family homes, there are no single-family home REITs. There's been talk of such entities, but nobody's formed one yet.

Not saying that one could not create such an entity, just that to date they don't exist so there'd be some big hurdles to overcome there in terms of selling investors on the concept.