Instead of helping people to stay in their homes, banks all across the country have been more likely to foreclose, this we know. There have been numerous efforts to fight the banks led by groups such as Occupy our Homes, The Home Defender’s League and even the process of making banks produce the deed to the actual property before they were allowed to foreclose. Even still it’s been a tough battle, one that the American people are losing thanks not only to the banks but also to private equity funds.
Take the Blackstone Group who’s been on a foreclosed home buying-spree since October 2012:
Between 2005 and 2009, the mortgage crisis, fueled by racially discriminatory lending practices, destroyed 53 percent of African American wealth and 66 percent of Hispanic wealth, figures that stagger the imagination. As a result, it’s safe to say that few blacks or Hispanics today are buying homes outright, in cash. Blackstone, on the other hand, doesn’t have a problem fronting the money, given its $3.6 billion credit line arranged by Deutsche Bank. This money has allowed it to outbid families who have to secure traditional financing. It’s also paved the way for the company to purchase a lot of homes very quickly, shocking local markets and driving prices up in a way that pushes even more families out of the game.
So when they say that housing prices are climbing and the housing market is rebounding, you really have to wonder if that’s true. Another diabolical plot that’s unfolding with Blackstone is that they have in turn devised some sort of housing rental securitization scheme which will probably end up collapsing like the housing bubble before it.
As the CorpWatch article reads:
Depending on whom you ask, the idea of bundling rental payments and selling them off to investors is either a natural evolution of the finance industry or a fire-breathing chimera.
“This is a new frontier,” comments Ted Weinstein, a consultant in the real-estate-owned homes industry for 30 years. “It’s something I never really would have dreamt of.”
However, to anyone who went through the 2008 mortgage-backed-security crisis, this new territory will sound strangely familiar.
The really sad and pathetic part is that Wall Street is scrambling to snatch up these rental backed securities. Considering how bad Blackstone has been at managing these rental properties this thing is set to blow up in investors faces. Also, we now face the reality that if one of these rental securities were to go bad, huge numbers of families would be evicted even if they paid their rents on time, because if the owners fall behind on payments it’s all over.