First of all, if you thought bankers were greedy bastards when they were selling people mortgages, what kind of landlords (to the very people who are killing their balance sheets) do you think they’ll make?

Second, a “right-to-rent” will kill the salvage value of the home on loans gone bad. If the bank can only sell the house to people willing to become landlords, the demand for foreclosed homes shrinks considerably. This can only make new mortgages more expensive for everyone else and runs completely counter to the current efforts to stimulate home sales.

Third, even if banks could sell most of the foreclosed properties to professional landlords in relatively short order, those transations will not be instantaneous. Citigroup et al will have to hire property managers all across the country to manage/maintain the houses in the meantime. This also increases the cost of mortgage credit.

Therein, Alpert called for the seller and buyer to acknowledge their mutual misjudgement by doing two things. The seller takes back the deed presumably because the purchaser has little or no equity in the house. Second, the seller gives the purchase a 5 yr lease at the current rental market rate. Both lose something but the owner/now renter has shelter and is not on the street.

That was a year ago and little has changed since then. I have no faith that it will.