The FRB issued a Policy Statement on Rental of Residential Other Real Estate Owned Properties. Banking organizations may rent one- to four-family OREO properties without having to demonstrate continuous active marketing of the properties. The policy statement also set forth the FRB’s expectations for rental of the properties, including a general guideline for evaluating the overall costs, benefits, and risks of renting, and specific expectations for large-scale residential OREO rentals. Further, the FRB advised that banking organizations are expected to comply with all applicable state and federal law including landlord-tenant laws, property maintenance standards, eviction protections under the Protecting Tenants at Foreclosure Act, and protections under the Servicemembers Civil Relief Act. Banking organizations are also required to review homeowner and condominium association bylaws and local zoning laws for prohibitions on renting the property. Click here for the press release here for the FRB letter, and here for the policy statement.
Alert April 17, 2012