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Two Histories of Financiers Profiting From Real Estate While Homeowners Go Belly Up
Key Excerpts from Article on Website of New York Times
Posted: December 16th, 2019
https://www.nytimes.com/2019/10/31/books/review-homewreckers...
In Homewreckers, his new book about the aftermath of the 2008 financial crisis, [Aaron] Glantz skillfully tells a bigger story about American housing thats tortuous, confounding and ultimately enraging. Along with Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership, by Keeanga-Yamahtta Taylor, Homewreckers shows what happens when private speculators get buoyed by government largess while non-tycoons are largely left to fend for themselves. After the housing bubble burst, the government was desperate to get lending banks off its books, and so it offered a sweet deal to prospective buyers of the banks: Those private investors could keep the gains on any loans held by the bank, but if the loans lost money, the government would bear most of the cost. It was like a mutant version of the subprime bubble that led to the financial crisis: Rather than renegotiate the loans, the new owners of these lending banks found there was more money to be made in foreclosing on the properties and becoming a class of landlord that had never been seen before, charging rent and fees to tenants not infrequently the previous owners who were foreclosed on while hoarding the equity for themselves. Corporate landlords ... are also more likely to buy properties in neighborhoods with large concentrations of African-American and Latino residents, who end up paying higher and higher rents that ultimately transfer wealth from their communities to investors far away.
Note: For more along these lines, see concise summaries of deeply revealing news articles on financial industry corruption from reliable major media sources.
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