Same Banks that caused foreclosure crisis profiting by buying foreclosed homes to rent back to us

[Chrom]

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.

Since the buying frenzy began, no company has picked up more houses than the Blackstone Group, the largest private equity firm in the world. 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."


Between 2005 and 2009, the mortgage crisis, fueled by racially discriminatory lending practices, destroyed 53% of African American wealth and 66% 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.

“You can’t compete with a company that’s betting on speculative future value when they’re playing with cash,” says Alston. “It’s almost like they planned this.”

http://www.commondreams.org/view/2013/11/26-5

[global1]

1. It's Almost Like They Planned This.......

I have to believe that the banks had developed an exit strategy in case the housing bubble blew up. What to do? How can we make lemonade out of a lemon of a housing bubble burst?

Hmmmmm.......

Let's sell the properties to a third party to cash in and then the third party can rent the homes back to the people who were foreclosed on because they're going to need someplace to live.

Everybody wins - right?

Except the people that were foreclosed upon in the first place - they're the ones we continue to further take advantage of.

[countryjake]

2. The Wall Street way...

Reading that piece at your link, I think you might want to read more about this in an article that xchrom posted early this morning. It's the Wall Street way:

How Wall Street Turned America Into Incarceration Nation

Transforming poorer neighborhoods into desirable real estate for the new elites often requires getting rid of the poor: jail becomes the new home for many.

http://www.alternet.org/corporate-accountability-and-workplace/how-wall-st-turned-america-incarceration-nation

And here is xchrom's thread:
http://www.democraticunderground.com/10024094251

[cthulu2016]

3. re: "shocking local markets and driving prices up..."

I am sure that if the banks were doing something to depress prices commondreams would congratulate them. (Are they "shocking" the rental market into price collapse by adding these new rental properties?)

Not 100% of 100% of everything is an outrage.

a) Fuck the banks.
b) There is nothing intrinsically the matter with buying houses to rent out.

[Chrom]

4. they are buying all the houses on the cheap, pricing families out of the market by using cash

Since we know they purposely used illegal practices to force these foreclosures, then take the opportunity to buy the houses up to rent to us....it seems like it was all a plan.

Disaster capitalism.