Could new federal foreclosure program work?

SCOTTSDALE, AZ - A new federal pilot program set to begin soon aims to clear the overstock of foreclosed homes on the market right now.

The goal is to reduce the inventory of foreclosed homes which would, in theory, drive up homes prices.

"It could work," said Joe Scarp, real estate broker and owner of Better Homes and Gardens Real Estate Phoenician Properties. "But keep in mind investors have been buying properties all throughout this crisis."

That's true, but this program aims to attract large investment firms that will buy 50, 100 or 200 foreclosed properties at a time.

It's a bulk sale. Those homes would then be turned into rentals. But one thing is not clear.

"The plan doesn't say how long those investors will be forced to keep the homes as rental only," said Scarp.

He suggests a rent-to-own plan may be more beneficial for buyers.

But not every foreclosed house will be included.

The plan will be administered by the Federal Housing Administration for homes owned by the quasi governmental lenders Fannie Mae and Freddie Mac.

That means thousands of vacant homes in the valley could soon be occupied. But rentals don't always increase the value of neighboring properties.

In the Valley, there are many foreclosure clusters and property values could actually decrease if too many homes become rentals.

It's not clear when the program will begin but government officials have been quoted as saying it is "imminent."

Do you think this program will work?