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Fed OKs banks as landlords

Lenders get green light on renting out REOs

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The Federal Reserve won't stand in the way if banks it supervises want to rent out homes they've repossessed, as long as it's part of "an orderly disposition strategy" to get foreclosed properties off their books "at the earliest practicable date."Given "the extraordinary market conditions that currently prevail," the Fed said it will not require that lenders demonstrate "continuous active marketing" of real estate owned (REO) properties if they decide that it makes more sense to rent them out than sell them at a loss."With mortgage delinquency rates remaining stubbornly high, the continued inflow of new real estate owned properties to the market -- expected to be millions more over the coming years -- will continue to weigh on house prices for some time," the Fed said in outlining the policies and procedures it expects banks to follow when renting out REOs.The Federal Reserve, which regulates state member banks, bank holding companie...