Green River Capital launches REO rental program
Green River Capital plans to operate a national program to rent out previously foreclosed homes. In March, the REO asset management company, which will oversee the program from its Salt Lake City headquarters, became one of three firms handling REO sales and upkeep for Freddie Mac. A Freddie spokesman clarified the Green River rental program was unrelated to its work with Freddie. But Green River's investment in a new rental program follows the Obama administration's move seeking new ways to handle the 92,000 properties currently held for sale by the Department of Housing and Urban Development, Fannie Mae and Freddie Mac. But on their balance sheets, Fannie held more than 135,000 REO at the end of the second quarter, more than double the 61,000 owned by Freddie. Like Federal Housing Finance Agency Acting Director Edward DeMarco made clear in a speech last week, Green River said the rental program would be conducted on a regional basis. Single-family and two-to-four unit homes, condominiums and town homes will all be eligible for possible rent. The former borrowers in the home and new tenants could participate in the program, Green River said. "With the housing market's continuing challenges and President Obama's recent request for firms to propose alternative rental approaches, GRC’s enhanced, non-traditional servicing program allows our clients to conserve their properties and prevent losses," said Joe D’Urso, president of Green River Capital. Some question the Obama initiative. Stan Humphries, chief economist at Zillow Inc. (Z), recently told Congress an influx of rentals from the government would disturb already strong demand in the market. According to a recent Campbell/Inside Mortgage Finance survey, investors are already turning more of the properties they buy from banks and the GSEs into rentals. Green River said it would use its network of real estate agents and other firms to craft rental strategies specific to the needs of individual markets. "We have built a large network of agents across the country," D'Urso said. "We have also established strong partnerships with local and national property management and preservation companies, which ensures positive results for our rental program and success for our clients, while also producing a winning situation for tenants." Write to Jon Prior. Follow him on Twitter @JonAPrior.