This is a thoughtful piece by Mary Manning from Columbia University on the REO-to-rent craze which has become big business for several large private equity groups. These companies are investing billions in single family rentals betting on the housing recovery. As Manning points out, history suggests that these out-of-town landlords are rarely successful managing things as well they anticipated. Calls for principal reduction on underwater mortgages have fallen largely on deaf ears with the government-sponsored HUD alternative for such relief being voluntary for the banks. Banks have no intention of writing down their non-performing assets as long as they are receiving billions in subsidies from the government anyway. For now at least, the solution from the government is to let large investors turn all those foreclosed borrowers into a huge pool of renters, while they enjoy a host of other government subsidies for their efforts to re-inflate housing markets.