The Federal Reserve issues a policy statement on Rental of Residential Other Real Estate Owned Properties
COMPLIANCE NEWS |
On April 5, 2012, the Federal Reserve Board (FRB) issued a policy statement reiterating that statutes and regulations published by the Federal Reserve's permit rental of residential properties acquired in foreclosure, as part of an orderly disposition strategy. The statement also outlines supervisory expectations for residential rental activities. The policy statement applies to banking organizations for which the Federal Reserve is the primary federal regulator.
The FRB’s general policy requires financial institutions make good faith efforts to dispose of foreclosed properties, including single-family homes, at the earliest practicable date. Due to current economic conditions, the policy statement allows banking institutions to rent foreclosed properties within legal holding-period limits without demonstrating continuous active marketing of the property for sale, provided that suitable policies and procedures are followed. The policy statement goes further to provide that rental properties that meet the definition of community development under the Community Reinvestment Act (CRA) regulations would receive favorable CRA consideration. Additional guidance is provided for financial institutions with 50 or more properties available for rent or currently rented.
Read the Federal Reserve’s Policy Statement.