I agree credit will be difficult for investors to buy and rent. I am imagining the situation may force a new kind of business – The REO-Landlord. What choice do they have? There is a carrying cost; Homes may get vandalized/become vice-dens attracting city nuisance laws, further depress neighboring property values that will have a snowballing affect.
This article in NYT puts a human face on the ex-owner now-renter population. As you can see, this is not the traditional politically weak poor/homeless. There is a political consequence to having a million faces like these losing their home.
