According to HousingWire, the bill would grant the right to homeowners entering foreclosure to occupy their homes for up to five years, making fair-market rent payments, determined by an independent appraiser, to the lender. The CEPR says this would give homeowners important "security" since they would not be "thrown out on the streets." CEPR cites the cost savings to "homeowners" who would be able to rent their homes rather than face evictions and have to rent on the open market.
From: Trout, Larry
Why would they be worried about renting on the open market, if they will pay fair market value?
For one, it forces foreclosures off the market for five years…so I imagine the price for non-foreclosures will go up in the mean time as the supply of available homes for sale decreases. I imagine there are some costs associated with maintaining a property's compliance with rental laws…but rent money is basically free cash for the mortgage holder that doesn't pay into any equity for the renter.
I imagine it's the real estate brokers that would be more affected by this than the banks.