Learn How Wall Street and Cash Investors Are Outbidding First Time Homebuyers, Displacing Tenants, and Changing Local Communities  

Bloomberg Picture of REO

Cropped version of Bloomberg News graphic of REO to Rental. See the full picture here: http://www.bloomberg.com/infographics/2013-12-20/blackstones-big-bet-on-rental-homes.html

Have you been following the news about the approximately 200,000 homes that Wall Street investors have purchased to create portfolios and then securitized the income and sell bonds?  Does that sound alarmingly familiar to the “create portfolios of mortgages and securitize the payments and sell bonds” profit scheme that brought our economy to its knees?  Are you also worried about the impact this is having on communities?

If so, tune into The Power is Now show on September 23rd at 8:30AM to hear host Eric Lawrence Frazier, MBA as he discusses this issue with two experts.  Click on this link to hear the show and join the conversation.

Maeve Elise Brown is the executive director of Housing and Economic Rights Advocates (HERA), a nonprofit law firm in Oakland, California.  Kevin Stein, associate director of the California Reinvestment Coalition, a nonprofit coalition that advocates for better access to banks.

They will discuss how all-cash investors have elbowed first-time homebuyers out of the market, displaced long-term tenants, and changed the fabric of local communities.

If you’re interested in learning more about this problem and what possible solutions are, check out the resources below.  The letter below was drafted by Maeve Elise Brown at HERA and Kevin Stein at CRC, with input from other allies and CRC members.  The letter outlines the problems created by the REO to Rental scheme, how the government is exacerbating the problem through mass sell-off’s of delinquent mortgages to investors, and how the problem could be addressed by regulators and policymakers.

80 Organizations Ask Federal Gvt. to Address Investor Cash Flooding Into Neighborhoods

Regulators Should Act Now to Protect First-Time Homebuyers, Renters, and Communities

March 4, 2014-California: Eighty organizations are calling on federal regulators to address first-time homebuyers being outbid, tenants being displaced, and neighborhoods undergoing dramatic changes as private equity and investor cash continues flooding into local housing markets, buying up homes. These problems have been worsened by banks withholding REOs from the market and federal housing agencies conducting bulk sales of foreclosed homes and distressed mortgages. One portfolio of single-family rental homes was securitized this fall, though both Fitch Ratings and Standard and Poor’s refused to grant AAA ratings to the securitization, citing numerous uncertainties with this new business model.  Read the rest of the press release here.

 Some more recent press coverage you might be interested in:

Another Shadow in Ferguson as Outside Firms Buy and Rent Out Distressed Homes (NYT: Sept. 3, 2014)

Federal Program Helps Keep Some Delinquent Borrowers in Their Homes (NYT: Sept. 2, 2014)

And press coverage about the letter signed by 80 organizations, urging regulators to act now:

 

Game of Homes The letter sent by 80 organizations expressing concerns about issues with private equity landlords is cited.  Rebecca Burns, Michael Donley, and Carmilla Manzanet. In These Times. March 31, 2014.

Single-family rental home giants form trade group in Washington The letter sent by 80 organizations to federal regulators, including HUD, SEC, CFPB, OCC, Federal Reserve, and FHFA about issues created by private equity and other investors is cited. Tim Logan. Los Angeles Times. March 26, 2014.

Consumer groups seek bond oversight The letter sent to 80 regulators about single family homes being purchased by private equity firms and other investors is cited. Yahoo Finance Australia. March 24, 2014.

Blackstone’s Home Buying Binge Ends as Prices Surge: Mortgages The letter signed by 80 organizations expressing concerns to national housing and bank regulators is cited. John Gittelsohn and Heather Perlberg. Bloomberg. March 14, 2014.

Ninja loans reborn in similar form The concerns outlined by 80 organizations about private equity and investor landlords is cited in this article.  Kevin Stein from the California Reinvestment Coalition is interviewed, as is Maeve Elise Brown, from Housing and Economic Rights Advocates.  Radio New Zealand News. March 10, 2014.

Could a Wall Street firm be your landlord? The letter sent by 80 nonprofit organizations to federal regulators is cited on a show that also includes an interview with Representative Mark Takano about his concerns with the REO to rental model.  A new report from the Center for American Progress about rental securitizatoin is also featured. Ari Melber. The Melissa Harris-Perry Show. March 9, 2014.

First-Time Buyers Being Shut Out In Growing Numbers First-time homebuyers are prevented from purchasing homes when they are forced to compete with all-cash investors. The letter from 80 organizations to the SEC, HUD, CFPB, Federal Reserve, OCC, and FHFA is cited. Mike Wheatley. RealtyBizNews. March 7, 2014.

Want to buy a foreclosure? You may have to compete with a hedge fund Maeve Elise Brown, Executive Director at Housing and Economic Rights Advocates (HERA), outlines the concerns housing advocates have with private equity groups and other investors purchasing large numbers of single family homes.  Brown cites a letter sent by 80 organizations to federal regulators, asking for their assistance in addressing the impacts on tenants, homeowners, and communities. Mark Huffman. ConsumerAffairs. March 6, 2014.

Shut Out of the Housing Market? First-Timers Dwindle The letter sent by 80 organizations to federal regulators is cited. RealtorMag. March 6, 2014.

REAL ESTATE: Where are the boomerang buyers? A letter that 80 organizations sent to the SEC, HUD, CFPB, Federal Reserve, OCC, and FHFA is cited.  The letter calls on regulators to address the impact of private equity firms and other investors flooding into local housing markets and buying up homes. Debra Gruszecki. The Press-Enterprise. March 5, 2014.

Housing Activists: Rental-Property Bonds Might Herald Next Housing Bust The letter outlining concerns by 80 organizations about investor and private equity money pushing out first-time homebuyers, displacing long-term tenants, and changing communities is cited. Dan Weil.MoneyNews. March 5, 2014.

Regulate Wall Street home buying, consumers plead Eighty organizations signed onto a letter, expressing concerns about the impact on first-time homebuyers, long-term tenants, and communities as private equity and investors purchases large numbers of homes with the intention of securitizing the rents from these single family homes. Kim Miller. The Palm Beach Post. March 5, 2014.

78 Groups Urge Scrutiny of Wall Street Cash in Local Housing Markets The letter sent by the California Reinvestment Coalition, Housing and Economic Rights Advocates, and 78 other organizations is cited at approximately 14.25 into the program. Amy Goodman. Democracy Now. March 4, 2014.

California advocates want to put the brakes on REO-to-rental A letter sent by 80 organizations to the SEC, HUD, CFPB, Federal Reserve, OCC, and FHFA outlining concerns about private equity groups and investors buying up homes is cited, as are specific concerns and recommendations to the regulators. Trey Garrison. HousingWire. March 4, 2014.

Wall Street Has Found Its Latest Dangerous Financial Product, Activists Warn A letter sent by the California Reinvestment Coalition, Housing and Economic Rights Advocates, and 78 other organizations is cited.  In the letter, the nonprofit organizations ask federal regulators for help with investor and private equity cash pushing out first-time homebuyers, displacing long-term tenants, and changing communities. Benjamin Hallman and Jillian Berman.HuffingtonPost Business. March 4, 2014.