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Here is a quote from Laurie Goodman who recently testified before Congress:
“The only way to absorb the excess supply of housing in an environment of constrained demand is to increase the demand for housing. This can come from two sources: either allow borrowers who recently defaulted on their mortgages to qualify for new mortgages, or encourage investor purchases. The problem with the former is that borrowers who have just defaulted do not have the means to make a down payment on a new home. Investors represent the most promising avenue to increase demand. It is very clear that policymakers need to aid the creation of a new asset class?investor-owned homes for rent. Thus far, the overwhelming majority of the rental units are in multi-family properties. That has to change.”
This is a link to a blog post that covers more of what she spoke about:
http://bayarearealestatetrends.com/2011/09/21/why-1-in-5-homes-could-default/
Paul
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