Our current economic crisis has been analogized as a “Financial Tsunami” because of the devastation of force and the uniformity of destruction regardless of your position in the financial landscape. The analogy sends a clear message that this event is not a normal cyclical storm, but one of great and rare magnitude that requires an appropriate response.

We responded with rescue efforts of unprecedented proportion, as one would expect in the wake of such a disaster. However, our relief management has stalled. Looking at other crisis, we see a different pattern from which we can learn. At some painful point, the focus of the disaster response shifts from rescue to recovery. That point in our response to the “Financial Tsunami” has come and been ignored. Our efforts continue to focus on rescue, when it is clear that some financial situations are beyond rescue.

Congressman Grijalva has reintroduced his idea to rescue homeowners. Originally introduced in 2009, the bill I have dubbed “own to rent”, has made a reappearance on the Congressman’s agenda. His plan would require foreclosing entities to offer the home to rent to the former owners. A court would determine fair market rent and the banks would be expected to allow the owners to become tenants. His plan lacks specificity in several key areas- Who would be responsible for maintenance, what is the recourse of the bank if the individual does not pay rent, and what impact will this have on people making “strategic default” decisions.

Remember the disaster that sprung from loan servicers trying to negotiate loan mods and short sales? Imagine the resulting chaos when we turn them all into landlords.

I mention Congressman Grijalva’s plan as an example of the thinking at our highest levels. The cost of implementing this program would be immense and the cost of maintaining it would have to fall on the banks or tax payers; either way it will trickle down to the individual.

Our energies still center around keeping people in the homes that they can no longer afford or in repopulating communities with owner occupied houses. Real estate investors, an ally in our recovery effort has been ignored and in some cases vilified. The image of the greedy and uncaring investor is not without a foundation. There are investors buying large tracts of homes, sight unseen, at pennies on the dollar and allowing them to sit delinquent and dilapidated. However, I believe the investor is the way to recovery.

We should create an FHA like program for investors. Allow them to purchase non-occupant homes with good interest rates and low down payments. In exchange, investors will be required to complete renovations on the property and list it for rent. We should even offer a 203k loan (allows purchased to finance in some rehabilitation costs at the time of purchase) to investors. There are specific loans on specific properties held by specific entities that offer this, but we need to open this market up to all vacant homes.

Just as home buyers do now on FHA loans, investors would be expected to fund the mortgage insurance that is required to protect banks on loan down payment loans. This would minimize the amount of tax payer dollars needed. A reasonable loan product will get individuals and small business owners back in home buying. They will employ thousands of contractors, sub-contractors, and workers across the country.

Moving from rescue to recovery is a physical, emotional, and psychological shift. It is also the next logical step in our response to the “Financial Tsunami”.