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(The Atlantic)   Remember the last time Wall Street dabbled in the housing market? Well, now that home prices are down, they're back in the game. Don't worry - this time is different   (theatlantic.com) divider line 60
    More: Spiffy, Wall Street, Sam Zell, Real estate pricing, housing market, Robert Shiller, securitization, risk appetite, Hyperion  
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1500 clicks; posted to Business » on 22 Sep 2013 at 3:08 AM (42 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-09-22 12:33:32 AM
Now, five years later, the fast money has returned to the housing market, but in a more tangible way: big, institutional investors are buying up thousands of single-family houses out of foreclosure, renovating them if needed, and renting them out to people who can no longer afford to buy them.

Count on these guys to find a way to profit from other people's misfortune.
 
2013-09-22 12:40:48 AM
This time inferential... They'll actually crash the economy instead of just almost crashing it.
 
2013-09-22 02:11:48 AM
Dead house cat bounce?
 
2013-09-22 02:18:22 AM

fusillade762: Now, five years later, the fast money has returned to the housing market, but in a more tangible way: big, institutional investors are buying up thousands of single-family houses out of foreclosure, renovating them if needed, and renting them out to people who can no longer afford to buy them.

Count on these guys to find a way to profit from other people's misfortune.


Done in one.

img.pandawhale.com
 
2013-09-22 02:28:43 AM
It always is.
 
2013-09-22 02:41:07 AM
But banks make shiatty landlords, they're going to lose a fortune on lots of these deals.  People who succeed in real estate tend to focus on only that, for the long term.
 
2013-09-22 03:17:52 AM
I am truly becoming fatigued at trying to wrap my head around every single farked up thing that happens in this country daily, all to the end of making the rich more money at the expense of the rest of us.

I realized this morning my stomach turns a little when I hear the words "Wall Street".  Others that trigger similar feelings include: "banks", "bankers," "investors," "brokers" (real estate or investment), and just about everything related.

I'm past the point of words or feelings for Congress, Republicans, Conservatives, and everything related.

sigh.
 
2013-09-22 03:20:30 AM

Incontinent_dog_and_monkey_rodeo: But banks make shiatty landlords, they're going to lose a fortune on lots of these deals.  People who succeed in real estate tend to focus on only that, for the long term.


A family member of mine tried to buy a water front house here in Florida (intercostal) that went into foreclosure and the bank would not sell because they offered them 20k less than they wanted (full payment in cash btw) The previous owner had taken good care of the property but apparently the bank didn't feel that was necessary. When they made the offer it had already been on the market for more than a year. They made another offer a couple of months later but only 10k less than the asking price. Again a couple months later they offered again and matched the price (They really wanted that house). What did the bank do? They raised the price 25k! It's now been 3 years and still no buyers and the house and property are in disrepair. Banks are farking retarded.
 
2013-09-22 03:59:41 AM

Lumber Jack Off: Incontinent_dog_and_monkey_rodeo: But banks make shiatty landlords, they're going to lose a fortune on lots of these deals.  People who succeed in real estate tend to focus on only that, for the long term.

A family member of mine tried to buy a water front house here in Florida (intercostal) that went into foreclosure and the bank would not sell because they offered them 20k less than they wanted (full payment in cash btw) The previous owner had taken good care of the property but apparently the bank didn't feel that was necessary. When they made the offer it had already been on the market for more than a year. They made another offer a couple of months later but only 10k less than the asking price. Again a couple months later they offered again and matched the price (They really wanted that house). What did the bank do? They raised the price 25k! It's now been 3 years and still no buyers and the house and property are in disrepair. Banks are farking retarded.


Blame the town for not demanding taxes and that properties be kept up.

Of course, that would crash values as the banks would have to actually sell the properties in the near term rather than maintaining an inventory and a house that looks like it's worth what they actually paid for it.

New Rule: All repossessed property must be sold at auction in 90 days after transfer to an entity at arms-length from the reposessor, his agent, or their agent's agent.

Problem solved. NEXT!
 
2013-09-22 04:06:45 AM
Expect "renter's rights" to be lobbied away in the near future.
 
2013-09-22 04:13:02 AM

Prophet of Loss: Expect "renter's rights" to be lobbied away in the near future.


This.

I prefer renting to ownership because houses are no longer the investment they once were; they're an albatross.
 
2013-09-22 04:14:18 AM
Here we f*cking go again.

Where I live housing prices have already shot out of reach of just about everyone, again. This time the madness is fueled by investors (foreign and domestic) with cash in their pockets who can easily outbid Joe and Jane Houseshopper who, if they can even get a bank to listen to them, have to mortgage their souls for the next 30 years.

They never learn.
 
2013-09-22 04:17:07 AM
Furthermore, any purchaser of a reposessed property must upgrade as needed and maintain said property to a liveable standard as defined by the prevailing codes within a period of one year. The property cannot be sold or transferred to another entity before required repairs have been made. If at the end of one year the property is not sufficiently repaired, the owner shall be declared delinquent, the municipality shall auction said property, take posession of the funds, and make repairs as needed, forwarding the balance of the auction proceeds minus a 10% penalty to the delinquent property owner. The delinquent property owner, his agent, and his agent's agent shall be inelligible to participate in said auction.

In the event that repairs are to exceed the auction price, the municipality may elect to either confiscate the other assets of the delinquent property owner to make up the difference, or demolish improvements on the property and sell the land to Habitat for Humanity or other such worthy organization for the sum of $1, with all prior liens and levies discharged from the property and assigned to the delinquent property owner.
 
hej
2013-09-22 04:59:50 AM
As somebody who just bought a new house, I don't know why we're saying "now" that prices are down.  It seems to me like they bottomed out at the beginning of the year and have since risen noticeably.
 
2013-09-22 05:10:47 AM

hej: As somebody who just bought a new house, I don't know why we're saying "now" that prices are down.  It seems to me like they bottomed out at the beginning of the year and have since risen noticeably.


They're still at about 80% of where they were in 2006 in many places.
 
2013-09-22 05:34:27 AM
So, when the market does crash again, can we get the pitchforks, torches, and guillotines?
 
hej
2013-09-22 05:37:27 AM

Incontinent_dog_and_monkey_rodeo: hej: As somebody who just bought a new house, I don't know why we're saying "now" that prices are down.  It seems to me like they bottomed out at the beginning of the year and have since risen noticeably.

They're still at about 80% of where they were in 2006 in many places.


Point is, they've been "down" for quite a while, and at this point the prices are on the upswing.
 
2013-09-22 07:46:43 AM

Goimir: Furthermore, any purchaser of a reposessed property must upgrade as needed and maintain said property to a liveable standard as defined by the prevailing codes within a period of one year. The property cannot be sold or transferred to another entity before required repairs have been made. If at the end of one year the property is not sufficiently repaired, the owner shall be declared delinquent, the municipality shall auction said property, take posession of the funds, and make repairs as needed, forwarding the balance of the auction proceeds minus a 10% penalty to the delinquent property owner. The delinquent property owner, his agent, and his agent's agent shall be inelligible to participate in said auction.

In the event that repairs are to exceed the auction price, the municipality may elect to either confiscate the other assets of the delinquent property owner to make up the difference, or demolish improvements on the property and sell the land to Habitat for Humanity or other such worthy organization for the sum of $1, with all prior liens and levies discharged from the property and assigned to the delinquent property owner.


Newsletter?
 
2013-09-22 07:55:19 AM
So, Congress passed a law that mandated banks make loans to unqualified people (someone who has extremely bad credit); then when those 'customers' couldn't make the payments, banks bundled the bad loans with good loans and sold them to unsuspecting buyers (like Country Wide) who then had to deal with the bad loans by foreclosing on customers; then merged with a big bank (Bank of America) who tried to back out of the purchase but were forced to go through with the deal by the government; then got bailed out by the government; had nothing to do with the 2008 real estate debacle.

This was NOT the fault of an out of control government run by corrupt politicians.

It was the rich bankers fault.
 
2013-09-22 08:02:37 AM
I fail to see how the actions described in TFA amount to anything like it was done before the crisis.
Basically there are companies out there buying up foreclosed houses in bulk from banks, rennovating them, then renting them out to people.
Unless they rent primarily to complete deadbeats, then turn around, package those rents and sell them as "investment grade" stuff to people who only care whether the stuff is securitized or not, I don't get the panic. That, and they are a tiny fraction of the market.

Wait, that's probably just a matter of time before everyone starts doing that.
 
2013-09-22 08:16:11 AM

neaorin: Wait, that's probably just a matter of time before everyone starts doing that.


Most of the big pension funds have wised up now.  In 2004-2006, they were investing in a ton of esoteric packages of loans that they themselves admitted that they didn't understand.  These days a ton more due diligence is required to provide any kind of plausible deniability.
 
2013-09-22 08:26:29 AM

Lumber Jack Off: Incontinent_dog_and_monkey_rodeo: But banks make shiatty landlords, they're going to lose a fortune on lots of these deals.  People who succeed in real estate tend to focus on only that, for the long term.

A family member of mine tried to buy a water front house here in Florida (intercostal) that went into foreclosure and the bank would not sell because they offered them 20k less than they wanted (full payment in cash btw) The previous owner had taken good care of the property but apparently the bank didn't feel that was necessary. When they made the offer it had already been on the market for more than a year. They made another offer a couple of months later but only 10k less than the asking price. Again a couple months later they offered again and matched the price (They really wanted that house). What did the bank do? They raised the price 25k! It's now been 3 years and still no buyers and the house and property are in disrepair. Banks are farking retarded.


It'll be interesting to see what happens to my late friend's place. House was in disrepair before he died. It's been a year, and the bank just took custody of the house. There are three foreclosures/vacants on his block. It's going to be a gong show.

He'd refinanced like six weeks before he died, BofA sold the mortgage in the interim but the family wasn't notified. It's good times. But, the house is such a hot mess that they're better off letting the bank have it.
 
2013-09-22 08:27:20 AM

neaorin: I fail to see how the actions described in TFA amount to anything like it was done before the crisis.
Basically there are companies out there buying up foreclosed houses in bulk from banks, rennovating them, then renting them out to people.
Unless they rent primarily to complete deadbeats, then turn around, package those rents and sell them as "investment grade" stuff to people who only care whether the stuff is securitized or not, I don't get the panic. That, and they are a tiny fraction of the market.

Wait, that's probably just a matter of time before everyone starts doing that.


Here in Charlotte the investors have bought 1 in 5 homes in the last year. That has artificially driven prices up. Sucks for me, I'm looking to buy early next year.

http://www.charlotteobserver.com/2013/09/19/4326787/1-in-5-charlotte -h omes-bought.html#.Uj7ePIakpLE
 
2013-09-22 09:00:50 AM
I wish rising prices afflicted St. Louis county - I just sold my house at a 50% loss because the market is absolutely abysmal. Then moving to the DC area has done nothing good for our finances.

The modern economy is nothing but a shell game run by banks and enabled by politicians.
 
2013-09-22 09:09:12 AM

serpent_sky: I am truly becoming fatigued at trying to wrap my head around every single farked up thing that happens in this country daily, all to the end of making the rich more money at the expense of the rest of us.

I realized this morning my stomach turns a little when I hear the words "Wall Street".  Others that trigger similar feelings include: "banks", "bankers," "investors," "brokers" (real estate or investment), and just about everything related.

I'm past the point of words or feelings for Congress, Republicans, Conservatives, and everything related.

sigh.


Just a suggestion, you may want to add Democrats to your list.  Many of your Democratic representatives and senators are a part of that "banks, bankers, investors, brokers" group.
 
2013-09-22 09:13:38 AM

fusillade762: Now, five years later, the fast money has returned to the housing market, but in a more tangible way: big, institutional investors are buying up thousands of single-family houses out of foreclosure, renovating them if needed, and renting them out to people who can no longer afford to buy them.



I don't see the problem with this.

would you rather have these homes sit vacant and fall further into disrepair, hurting home values for everyone else in the area? doing so would also limit the rental units available, pushing up rental prices.
 
2013-09-22 09:42:25 AM

dumbobruni: fusillade762: Now, five years later, the fast money has returned to the housing market, but in a more tangible way: big, institutional investors are buying up thousands of single-family houses out of foreclosure, renovating them if needed, and renting them out to people who can no longer afford to buy them.


I don't see the problem with this.

would you rather have these homes sit vacant and fall further into disrepair, hurting home values for everyone else in the area? doing so would also limit the rental units available, pushing up rental prices.


The problem is the ultra-rich are creating yet another money funnel. If people can't afford their own home and have to rent, they end up paying the owners and have nothing to show for it in the end. Meanwhile the people who bought the houses have an asset, someone to make payments on the asset, and can dump it for a profit when times are better. For them it's win-win-win, and makes them look good in the process.

What's disgusting is that people can't afford to buy a house anymore!
 
2013-09-22 09:54:18 AM

SilentStrider: This time inferential... They'll actually crash the economy instead of just almost crashing it.


Ok, how did autocorrect change "is different" to "inferential"?
 
2013-09-22 09:59:47 AM
Still happy I live in a geographically constrainded area, and thus have been mostly immune to the ups and downs over the last decade.
 
2013-09-22 10:18:24 AM

ajgeek: dumbobruni: fusillade762: Now, five years later, the fast money has returned to the housing market, but in a more tangible way: big, institutional investors are buying up thousands of single-family houses out of foreclosure, renovating them if needed, and renting them out to people who can no longer afford to buy them.


I don't see the problem with this.

would you rather have these homes sit vacant and fall further into disrepair, hurting home values for everyone else in the area? doing so would also limit the rental units available, pushing up rental prices.

The problem is the ultra-rich are creating yet another money funnel. If people can't afford their own home and have to rent, they end up paying the owners and have nothing to show for it in the end. Meanwhile the people who bought the houses have an asset, someone to make payments on the asset, and can dump it for a profit when times are better. For them it's win-win-win, and makes them look good in the process.

What's disgusting is that people can't afford to buy a house anymore!


but the people that are renting need a place to live. you don't want a situation like Detroit, where despite a huge % of vacant homes, there is a shortage of rentals. in some areas it is impossible rent due to a lack of inventory. rents rose by 8% last year, with your choice of "cheap" but utter garbage or nice but ludicrously expensive with no middle at all.

without these investors the housing market would still be in the dumps in most of the country too.

many of these investors are doing rent to own deals. they actually give renters a chance to build equity, and own a home free and clear after less than 10 years (rather than 30 years with a traditional mortgage).

if you want to be angry at someone, direct it at the banks for having a frustrating and confusing foreclosure & short sale process, and government for failing to address these issues (more of a state problem than federal).
 
2013-09-22 10:29:33 AM
Once again, the government is forcing honest, hard-working banks to give money to "urban" people that listen to the rap music that goes "boogie woogie baby wanna stick it in ya!"

Thanks, Obama.
 
2013-09-22 10:41:30 AM
oh, a house may be an asset, but until the mortgage is paid off it is a very risky asset: highly leveraged, illiquid, hard to value, highly emotional, very high transaction fees, and greatly affected by factors beyond the homeowner's control.

it is an extremely inefficient market, and highly irrational. its a fairly terrible "investment" choice for most people; realtors have done an amazing job convincing people that it isn't.
 
2013-09-22 10:49:40 AM
Subby must have a different definition of "spiffy" than I do.
 
2013-09-22 11:33:06 AM

dumbobruni: many of these investors are doing rent to own deals. they actually give renters a chance to build equity, and own a home free and clear after less than 10 years (rather than 30 years with a traditional mortgage).


Rent to Own? Haven't we learned how bad those are via RAC and Aaron's yet? Oh no, they aren't being charitable; someone's trying to make bank here at the expense of others.
 
2013-09-22 11:58:18 AM
And that's why one in five houses sold in Charlotte, NC were sold to investors over the past year.
I don't give a crap what they do with housing, never considered my house as an investment, but a place to hang my hat, I've made improvements over the years for my own satisfaction, not to increase the market value. Owe less on the house than what I've got in the credit union.
They can honk my bobo.
 
2013-09-22 12:06:35 PM
What does a Realtor say when a Seller stops by?  Why is it the opposite of what they say to a Buyer?  Why are opinions commissioned? What an Industry can decide for itself,it will.  Your Yes and No are not opinions and should be treated as such.
 
2013-09-22 12:49:08 PM

MabalzIzari: banks bundled the bad loans with good loans and sold them to unsuspecting buyers (like Country Wide)


You're either a master troll or an idiot.
 
2013-09-22 01:05:14 PM

ajgeek: dumbobruni: many of these investors are doing rent to own deals. they actually give renters a chance to build equity, and own a home free and clear after less than 10 years (rather than 30 years with a traditional mortgage).

Rent to Own? Haven't we learned how bad those are via RAC and Aaron's yet? Oh no, they aren't being charitable; someone's trying to make bank here at the expense of others.


welcome to capitalism. think of rent to own as owner-provided financing (anyone can arrange this, this isn't just for the wealthy.

its interesting that you at the same time want people to have a chance to build equity and profit off an eventual sale, but then attack other people for finding ways to get the housing market back in shape in an era of much stricter lending standards.

I bet you where cheering when higher risk controls and reserve requirements were put on banks, and then turned around at got angry with banks for cutting back on lending. You cannot have both.

cognitive dissonance isn't just for teabaggers.
 
2013-09-22 01:25:40 PM

dumbobruni: ajgeek: dumbobruni: many of these investors are doing rent to own deals. they actually give renters a chance to build equity, and own a home free and clear after less than 10 years (rather than 30 years with a traditional mortgage).

Rent to Own? Haven't we learned how bad those are via RAC and Aaron's yet? Oh no, they aren't being charitable; someone's trying to make bank here at the expense of others.

welcome to capitalism. think of rent to own as owner-provided financing (anyone can arrange this, this isn't just for the wealthy.

its interesting that you at the same time want people to have a chance to build equity and profit off an eventual sale, but then attack other people for finding ways to get the housing market back in shape in an era of much stricter lending standards.

I bet you where cheering when higher risk controls and reserve requirements were put on banks, and then turned around at got angry with banks for cutting back on lending. You cannot have both.

cognitive dissonance isn't just for teabaggers.


Actually I'm new to the whole thing. But I've done my homework on Rent-to-Own and it almost never ends well for the buyer. Either they pay multipliers of the actual value or they can't do it in the first place and end up having whatever was "rent to own" taken away. Besides, aren't the people who are buying up the cheap properties responsible for causing the bubble and subsequent crash in the first place?
 
2013-09-22 01:35:42 PM
farm2.static.flickr.com
 
2013-09-22 02:22:57 PM

MabalzIzari: So, Congress passed a law that mandated banks make loans to unqualified people (someone who has extremely bad credit); then when those 'customers' couldn't make the payments, banks bundled the bad loans with good loans and sold them to unsuspecting buyers (like Country Wide) who then had to deal with the bad loans by foreclosing on customers; then merged with a big bank (Bank of America) who tried to back out of the purchase but were forced to go through with the deal by the government; then got bailed out by the government; had nothing to do with the 2008 real estate debacle.

This was NOT the fault of an out of control government run by corrupt politicians.

It was the rich bankers fault.


One can certainly complain about GSE's (fred/fan) being created by LAW, but there is no law or statute or reg. that required a REGULATED mortgage originator to write a bad mortgage.  FRED jumped the shark owing to the execs doing their best to maintain market share (relevance) by getting in bed with Countrywide (thereby increasing the compensation for execs at FRED - and Fannie - too, in the short term) those same execs lied to their stockholders about their subprime exposure (kinda like their buddies did on wall street).:  And, hey, why should businesses created by Congress have to lobby Congress? (Fred/Fan biggest contributors/200 million over ten years).

BOA? Countrywide acquisition occurred prior to the blow-up.  BOA was aware that several States were going after Countrywide - but Lewis signed-on anyway.  Kinda like Merrill Acquisition and Thain's bathrooms...  Kinda like Wells having to eat the fines for Wachovia's money laundering post acquisition (oh, due diligence prior to acquisition?).  Won't even mention MERS contribution.

It was't long after the dotcom crash that the investment bankers went low-down on their knees prising nickels from between the treads of tires, e.g., Lehman opened its alt-A mortgage mill, AURORA out in Colorado in 2001 (pretty nice when one has control of the appraisers and underwriters to feed `tasty shiat' upstream to be sold around the world as triple A.) How about Fitch (S&P/Moody's)? `ah, we finally got around to checking the data from the loan tapes - basis for cdo's etc. - and, uh.. they're "shot through with fraud".

Sure, the gov. is at fault (tools of the deregulation happy).  Either Greenspan or Bernanke could have invoked the 1994 HOEPA act and let the air out of the bubble at any time.  Given that it really hadn't been that long since the S&L crisis (dereg)/Enron(dereg) it seems obvious where the problem lies.  Greed trumps the Good of the Republic and buying `reregulation' via lobbying (dereg) pays the most. Well, at least provide some pandering and fodder for the fire:   http://archives.hud.gov/news/2003/pr03-140.cfm

/memories are very short (make a big down payment with a local credit union)
 
2013-09-22 02:53:27 PM
As someone looking to buy a home to live in, (in the Bay Area no less) I am not getting a kick out of this.
My only hope is that they will crash the market again, and I can pick up a "bargain."

Soon.
 
2013-09-22 03:26:19 PM

sirrerun: As someone looking to buy a home to live in, (in the Bay Area no less) I am not getting a kick out of this.
My only hope is that they will crash the market again, and I can pick up a "bargain."

Soon.


Wait until the acqui-hire bubble bursts.  I figure you've got 2, maybe 3 years.
 
2013-09-22 04:57:55 PM
ajgeek: What's disgusting is that people can't afford to buy a house anymore!

They couldn't afford to buy a house before.  It's just that 15 years ago that didn't stop anybody and we ended up with the mess we were in a half dozen years back.

There's an interesting mix of comments in these threads between these two themes:

1)  The banks created the problem by giving predatory loans to people that couldn't afford them resulting in a massive raft of foreclosures that decimated the market.

2)  The banks are causing a problem by not giving people loans for houses (That, presumably, they can't afford...).
 
2013-09-22 05:05:39 PM

ajgeek: dumbobruni: ajgeek: dumbobruni: many of these investors are doing rent to own deals. they actually give renters a chance to build equity, and own a home free and clear after less than 10 years (rather than 30 years with a traditional mortgage).

Rent to Own? Haven't we learned how bad those are via RAC and Aaron's yet? Oh no, they aren't being charitable; someone's trying to make bank here at the expense of others.

welcome to capitalism. think of rent to own as owner-provided financing (anyone can arrange this, this isn't just for the wealthy.

its interesting that you at the same time want people to have a chance to build equity and profit off an eventual sale, but then attack other people for finding ways to get the housing market back in shape in an era of much stricter lending standards.

I bet you where cheering when higher risk controls and reserve requirements were put on banks, and then turned around at got angry with banks for cutting back on lending. You cannot have both.

cognitive dissonance isn't just for teabaggers.

Actually I'm new to the whole thing. But I've done my homework on Rent-to-Own and it almost never ends well for the buyer. Either they pay multipliers of the actual value or they can't do it in the first place and end up having whatever was "rent to own" taken away. Besides, aren't the people who are buying up the cheap properties responsible for causing the bubble and subsequent crash in the first place?


not so much. private equity firms didn't start buying up individual homes until house prices collapsed. it really took off in 2010.
 
2013-09-22 05:30:01 PM

rewind2846: Here we f*cking go again.

Where I live housing prices have already shot out of reach of just about everyone, again. This time the madness is fueled by investors (foreign and domestic) with cash in their pockets who can easily outbid Joe and Jane Houseshopper who, if they can even get a bank to listen to them, have to mortgage their souls for the next 30 years.

They never learn.


Let me guess.  Puget Sound area?
 
2013-09-22 06:05:41 PM

dumbobruni: not so much. private equity firms didn't start buying up individual homes until house prices collapsed. it really took off in 2010.


So different batch of people; meaning it might actually be different this time.

/Yes, I'm trying to learn.
//It's a lot to take in.
 
2013-09-22 06:46:08 PM

MabalzIzari: So, Congress passed a law that mandated banks make loans to unqualified people (someone who has extremely bad credit); then when those 'customers' couldn't make the payments, banks bundled the bad loans with good loans and sold them to unsuspecting buyers (like Country Wide) who then had to deal with the bad loans by foreclosing on customers; then merged with a big bank (Bank of America) who tried to back out of the purchase but were forced to go through with the deal by the government; then got bailed out by the government; had nothing to do with the 2008 real estate debacle.

This was NOT the fault of an out of control government run by corrupt politicians.

It was the rich bankers fault.


Wrong premise.  Which shows how badly the noise machine can skew reality.  If you think it was the CRA loans that caused the housing crash then perhaps you should keep sucking Boehner's boner, and things will never change.  CRA loans, which were in fact regulated, failed at 1/5th the rate of ordinary sub-prime loans.  "Unsuspecting buyers...?"   I'll just stop here.  In fact, your whole thesis just gets it all wrong.  But you do pull it out in the end when you claim it was the rich banker's fault, because, yeah, in the end, they were the main driver.
 
2013-09-22 07:51:18 PM
The "CRA caused it" thing is total BS.
I'll just leave this here.
 
2013-09-22 07:56:19 PM

hammettman: MabalzIzari: So, Congress passed a law that mandated banks make loans to unqualified people (someone who has extremely bad credit); then when those 'customers' couldn't make the payments, banks bundled the bad loans with good loans and sold them to unsuspecting buyers (like Country Wide) who then had to deal with the bad loans by foreclosing on customers; then merged with a big bank (Bank of America) who tried to back out of the purchase but were forced to go through with the deal by the government; then got bailed out by the government; had nothing to do with the 2008 real estate debacle.

This was NOT the fault of an out of control government run by corrupt politicians.

It was the rich bankers fault.

Wrong premise.  Which shows how badly the noise machine can skew reality.  If you think it was the CRA loans that caused the housing crash then perhaps you should keep sucking Boehner's boner, and things will never change.  CRA loans, which were in fact regulated, failed at 1/5th the rate of ordinary sub-prime loans.  "Unsuspecting buyers...?"   I'll just stop here.  In fact, your whole thesis just gets it all wrong.  But you do pull it out in the end when you claim it was the rich banker's fault, because, yeah, in the end, they were the main driver.


I'll say it again: most of the subprime loans were refinancings by house flippers.  They artificially drove up demand which resulted in a glut of supply.  The mortgage lenders (including poor CountryWide) built their model on the assumption that housing prices would never drop and that any defaults could easily be recovered by new buyers.  Then the Law of Supply and Demand came along and punched everyone in the dick.
 
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