Well, the market is full of upside down homes, you can’t refinance unless you come up with the difference in most cases.
The renting the foreclosed homes is just going to be a disaster, the renters will trash the homes, the market for rentals will tank creating a ton of new foreclosures, and eventually these houses have to hit the market ... they are only postponing the bottom of the market.
They should just get it over with.
Maybe people with cash will by more than one house and tear them down to get their scrap value. That is better than nothing.
I actually was thinking some of the houses in Baltimore or Detroit may have some good scrap property myself. I have to do something with these worthless dollars.
I guarantee the Government will pay the banks the amount the owner financed then refinance at the lower rate and the taxpayers will be left holding the difference.
The bank's market shares went up on the news because they heard that they won't be the ones holding the bag, the taxpayer's will.