A New Niche for Property Managers on the Horizon?

With the huge kerfuffle in the housing market of late, the time has come for creative solutions.

In order to combat the rising foreclosures and housing vacancies, officials are looking at potentially allowing homeowners who have fallen behind on their mortgage payments to stay in their homes by becoming long term rental tenants.

First, let’s outline the positives:

1. It would cut down on vacant homes
2. Allow homeowners to stay in their houses
3. Give banks a chance to recoup some of the loss on the mortgage
4. Provide a new type of investment

Here are some issues that come to mind:

1. How long would a homeowner have to rent his old house before being able to think about purchasing a house or even moving again?
2. How can the transfer from mortgage to rental agreement be made without disrupting the mortgage markets?
3. If a homeowner defaults on his mortgage on account of being jobless, why would it be any easier for him to pay a “fair rental amount” on his home than his current mortgage payment?

In addition, this scenario brings up another interesting possibility; if a solution like this were to be put in place, would professional property managers have a new niche to fill?

Think about it, if banks become the primary owners of homes, but the former owners have signed a long term lease to stay on as tenants, doesn’t this then revert to a traditional rental scenario? Homeowners would no longer be responsible for things like repairs, updating, or even some types of regular maintenance, and banks would need to hire professionals to ensure their assets are being well cared for.

Does this seem like a viable solution for a foreclosure market driven by both the housing crisis and rising unemployment? What other creative solutions might work to get the housing market back on track?