If you’re like me, you’ve started to glaze over a bit about all the Foreclosure, home sales declines and credit crunch headlines.  I feel like I can’t watch an episode of Top Chef (guilty pleasure) without seeing an ad, news snippet, headline or blog post (like this one J) around Foreclosures.

But then I was flying back from Boston earlier this week, and overheard this actual conversation between two JetBlue flight attendants:

FA1:       “How’s it going at home?”
FA2:       “Not so good.  I just lost my house”

FA1:       “What happened?”
FA2:       “My mortgage rate went up and I couldn’t afford the payments.  Got way behind and now they’re taking the house”

FA1:       “Oh my god.  That’s terrible, what are you going to do?”
FA2:       “We’re going to move in with my parents.”

And it got me thinking…

Can you imagine the actual experience of losing your home?  I’m not even talking about the lost real estate investment.  Think about actually having to pack up your stuff, find a new place (maybe your parents) and move out of your house.  Think about explaining this to your kids.  This breaks my heart.

Why is it that there hasn’t emerged some party willing to buy these properties in bulk from banks and rent them back to the current owners at a reasonable rent so they don’t have to move out?

Yes, I know that you have to work the NOI and cash flows.  Can the buyer service the debt, charge enough rent, etc.  What’s their cost/access to capital, etc? But my simplistic read is that for someone willing to be in the property management game (and maybe that’s the rub) this is an opportunity to build a large asset base with a  baked in set of cash flows, and at the same time do something philanthropic.  I’d also imagine there’d be some tax advantage in there.

Maybe this is happening.  But if it’s not, it should.  Let me know if you’ve heard about someone doing this.

alex