Dean Baker provides a clear and concise description of this "Own to Rent" plan in the most recent issue of Economists' Voice. The key advantages of this plan:
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It is worth contrasting this own to rent proposal with President Bush’s plan to freeze some subprime mortgages at the teaser rates. The plans differ along three dimensions. First, they will apply to somewhat different groups of homeowners. Second, the “teaser-freezer” plan may still leave many homeowners unable to pay their mortgages. And third, the own to rent plan is intended to be an actual change in the rules of foreclosure that is binding, not a commitment that is made or withdrawn at the discretion of mortgage holders.
I have been a fan of this plan since I first read about it. (Read a number of earlier posts here and an op-ed Dean and I co-authored here.) To summarize why, I don't think that equity holders should come out with positive equity in a bailout. The plan sets the starting point for negotiations to zero equity for the "homeowner" but doesn't put them out on the streets.
Read the whole thing.