If a property is likely to sit vacant for long periods of time and create problems for the surrounding area, servicers might consider sale of REO properties to, or partnerships with, responsible third parties, including local governments and nonprofit groups. Financial institutions should look for ways to partner with community groups and governments to support strategies to stabilize communities affected by foreclosure.
They can bring invaluable technical capacity to plan and execute stabilization efforts. Banks can also support efforts to reuse REO properties by providing home loans to new homebuyers and by financing nonprofit entities and others for the acquisition and rehabilitation of REO properties.