Our President's newest escape from reality is to propose that when a home is foreclosed, the defaulting borrower must be permitted to stay in the home simply by paying rent equal to the current market rent for “similar” homes.
First, we must understand that, because in most places home values have declined anywhere between 30% and 60% below the peak, the price to rent has also declined.
Even worse, because there are still millions of home owned by flippers who hoped to sell to a greater fool, these flippers are desperately trying to rent at any price in an effort to prolong their agony. Therefore, rents have declined even more than the price to buy a home declined.
