Geolibertarian, what is your take on why the too big to fail banks are keeping their shadow inventory off the market? (not selling their repossessed homes)
The title of the following documentary says it all: Real Estate 4 Ransom https://www.youtube.com/watch?v=XL3n59wC8kk
I've watched the housing crash for years now and all over the USA, homes are sitting off the market and rapidly deteriorating causing urban blight in communities. What's the agenda?
The same agenda it's always been: to grow rich without
"producing" by privately pocketing publicly generated land gains
-----------------------------------------Wall Street slumlords’ outrageous new scheme: How they could wreck the economy againRemember mortgage-backed securities and the financial crisis they caused? This latest gambit will put you in shock
Nov. 6, 2013
You’d think that investors would run away from a new Wall Street innovation as fast as Congress runs away from a good idea. But instead, they’re flocking to the latest product peddled by large banking interests, even though they look almost exactly like the mortgage-backed securities that were a primary driver of the financial crisis. These new securities, backed by rental payments, also have real-world implications for millions of renters, who could end up turning in their monthly checks to Wall Street-based absentee slumlords.
Over the past couple of years, private equity firms and hedge funds have bought up over 200,000 single-family homes, mostly discounted foreclosed properties in communities wrecked by the housing crash, such as Phoenix, Atlanta, Tampa, Sacramento, Los Angeles and Riverside, Calif. They have spent billions to scoop up these vacant homes at fire-sale prices, renovate them, and rent them out, promising investors double-digit annual returns on the rental revenue. Private equity firms like Blackstone, which owns more than 40,000 single-family homes, think they can build an entirely new asset class out of this scheme, controlling the rental market for single-family homes. The irony is rich: Wall Street created the conditions for millions of foreclosures, then they sweep in to buy up the homes and rent them out, often to the same people they kicked onto the street.
In order for this to work, firms need cash to outbid the competition. So Blackstone teamed with Deutsche Bank, Credit Suisse and JPMorgan Chase to put together the first-ever rental revenue bond, named “Invitation Homes 2013-SFR1.” Basically, Blackstone took out mortgages with the banks on 3,207 of its rental properties, in exchange for $479 million in cash, and they will forward rental payments to the bondholders to pay back the loan.
]http://www.globalresearch.ca/how-wall-street-has-turned-housing-into-a-dangerous-get-rich-quick-scheme-again/5360077How Wall Street Has Turned Housing Into a Dangerous Get-Rich-Quick Scheme — Again
By Laura Gottesdiener
Global Research, December 02, 2013
TomDispatch 26 November 2013
You can hardly turn on the television or open a newspaper without hearing about the nation’s impressive, much celebrated housing recovery. Home prices are rising! New construction has started! The crisis is over! Yet beneath the fanfare, a whole new get-rich-quick scheme is brewing.
Over the last year and a half, Wall Street hedge funds and private equity firms have quietly amassed an unprecedented rental empire, snapping up Queen Anne Victorians in Atlanta, brick-faced bungalows in Chicago, Spanish revivals in Phoenix. In total, these deep-pocketed investors have bought more than 200,000 cheap, mostly foreclosed houses in cities hardest hit by the economic meltdown.Wall Street’s foreclosure crisis
, which began in late 2007 and forced more than 10 million people
from their homes, has created a paradoxical problem. Millions of evicted Americans need a safe place to live, even as millions of vacant, bank-owned houses are blighting neighborhoods and spurring a rise in crime
. Lucky for us, Wall Street has devised a solution: It’s going to rent these foreclosed houses back to us. In the process, it’s devised a new form of securitization that could cause this whole plan to blow up — again.
Since the buying frenzy began, no company has picked up more houses than the Blackstone Group, the largest private equity firm in the world. Using a subsidiary company, Invitation Homes, Blackstone has grabbed houses at foreclosure auctions, through local brokers, and in bulk purchases directly from banks the same way a regular person might stock up on toilet paper from Costco.
In one move, it bought 1,400 houses in Atlanta
in a single day. As of November, Blackstone had spent $7.5 billion
to buy 40,000 mostly foreclosed houses across the country. That’s a spending rate of $100 million a week
since October 2012. It recently announced
plans to take the business international, beginning in foreclosure-ravaged Spain.
Few outside the finance industry have heard of Blackstone. Yet today, it’s the largest owner of single-family rental homes in the nation — and of a whole lot of other things, too. It owns part or all of the Hilton Hotel chain, Southern Cross Healthcare, Houghton Mifflin publishing house, the Weather Channel, Sea World, the arts and crafts chain Michael’s, Orangina, and dozens of other companies.
Blackstone manages more than $210 billion
in assets, according to its 2012 Securities and Exchange Commission annual filing. It’s also a public company with a list of institutional owners
that reads like a who’s who of companies recently implicated in lawsuits over the mortgage crisis, including Morgan Stanley, Citigroup, Deutsche Bank, UBS, Bank of America, Goldman Sachs, and of course JP Morgan Chase, which just settled a lawsuit with the Department of Justice over its risky and often illegal mortgage practices, agreeing to pay an unprecedented $13 billion fine.
In other words, if Blackstone makes money by capitalizing on the housing crisis, all these other Wall Street banks — generally regarded as the main culprits in creating the conditions that led to the foreclosure crisis in the first place — make money too.
It's the ultimate "welfare" scheme, and our anti-Georgist tax system is what makes it all possible.
The solution? Henry George's Single Tax
Yet if that urgently-needed tax reform ever came close to being implemented in response to public pressure, both (a) privatize-everything-under-the-sun (including Mother Nature itself) anarcho-
"capitalists" and (b) collectivize-everything-under-the-sun (including humanity itself) communists would rail hysterically against it, and, in so doing, reveal for all to see that they're not so "different" from one another after all. http://forum.prisonplanet.com/index.php?topic=232841.0
(Rothschild and Rockefeller interests created the Libertarian-Communist dialectic)