Unless you've just recently been rescued from decades stranded on a deserted island, you've heard of someone buying, fixing and flipping single family homes. It has long been the staple method for the everyday person to make money in real estate.
In the past, government policies overemphasized homeownership. Instead, Americans should have a variety of affordable and attractive rental and purchase options, in line with their needs and resources.
Simple economics teaches us that we have a self-correcting economy but whenever we're all mired in the throes of an exciting market, we seem to develop amnesia for what could happen based on how similar markets have transpired in the past.
Although most of the housing markets with big price gains exhibit unhealthy fundamentals, some markets with rising prices are healthy. Markets with flat or falling prices include both healthy and unhealthy markets.
Homeownership offers an opportunity to build wealth, through equity, that renters simply do not enjoy. It needs to be done right; the loans need to be responsible and sustainable. But make no mistake: Homeownership is an irreplaceable engine of class mobility.
Renting out REO properties would be a drop in the bucket -- it wouldn't clear much of the housing inventory and wouldn't ease rising urban rents, but it would help shore up neighborhoods where housing prices took the biggest slide, and that makes it worthwhile.