Repossessed houses to be rented

Lloyds Banking Group is to create a mechanism to help restore the value of thousands of non-performing home loans with Grainger, the UK's largest listed residential landlord.
This is an interesting development. Are they trying to avoid having to sell at a loss as house prices fall? I suspect so.
Is it a good thing?
It might not be good for the person who is having their house repossessed. What value is being placed on the property if it is being passed to a landlord? Is it a fair market value? Surely the fair market value would be achieved by placing it for sale on the open market as is the way with repossessions normally.
If they don't sell the asset then how do they assign a value? Is the landlord paying the same amount at the mortgage outstanding? If not then Lloyds (a tax payer part owned bank - Lloyds, a huge % owned by the taxpayer!) is not doing the tax payers any favours.
Will the extra rental properties on the market further help decline rents making it an even worse idea for the banks? What if the banks' landlord has to shell out for many repairs and upgrades to the property?
Does it make financial sense still?
I think this whole idea of propping up the housing market is wrong - I understand why they're doing it - because of Gordon Brown's messing with the banks and propping them up - the tax payer will have to continue to suffer in many ways because of the continued propping up of property prices.
Presumably this landlord company will be taking hefty fees for managing the properties too - so will Lloyds make any money from this?
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