A $60 Billion Housing Grab by Wall Street

[G_j]

https://www.nytimes.com/2020/03/04/magazine/wall-street-landlords.html

Hundreds of thousands of single-family homes are now in the hands of giant companies — squeezing renters for revenue and putting the American dream even further out of reach.

By Francesca Mari
Published March 4, 2020
Updated March 5, 2020

Chad Ellingwood wasn’t really in the market for a home in the summer of 2006. But when his best friend came across an intriguing listing in Woodland Hills — a bedroom community in Los Angeles County’s San Fernando Valley — the two men decided to visit on a whim.

Entering the property beneath the canopy of a grand deodar, Ellingwood, a big man with a gentle presence, felt as if he had been transported to a ranch house in Northern California, much like one he often visited as a child, all old growth and overgrown greenery — olive trees, citrus trees, sycamores and redwoods. He and his friend meandered past a pond to an inviting teal house built in 1958, “a whimsical masterpiece,” Ellingwood told me. Inside there was a “captain’s quarters” — a room designed to look like the hull of a boat with a built-in water bed and drawers — and numerous stained-glass windows that the couple who owned it had made themselves. The pièce de résistance depicted a faerie woman with flowing hair whose fingers turned into peacock feathers. Behind the house were a couple of small buildings, one of which was office-size — a meditation “Zen den,” Ellingwood thought. The other was an A-frame, Swiss-chalet-style granny unit above the garage, where the owner displayed a toy train collection.

“The house was not in amazing shape,” Ellingwood said. “It needed some help. But I loved it. I wanted it immediately.”

One of Ellingwood’s goals had always been to buy a house by the time he turned 30 — a birthday that unceremoniously came and went six months earlier. When Ellingwood began speaking to lenders, he realized he could easily get a loan, even two; this was the height of the bubble, when mortgage brokers were keen to generate mortgages, even risky ones, because the debt was being bundled together, securitized and spun into a dizzying array of bonds for a hefty profit. The house was $840,000. He put down $15,000 and sank the rest of his savings into a $250,000 bedroom addition and kitchen remodel, reasoning that this would increase the home’s value.



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[jimfields33]

1. I can't see how companies can do this.

However the guy in the story didn’t pay his mortgage for months but on the day of the action wrote a check for 27K? Why not just pay the mortgage when due? I don’t understand that. I know he was going through a divorce but he seemed to want the house.

[Chainfire]

2. Dropping the Fed interest rates

Makes it a sweetheart deal to buy housing. All of this is just another step towards a feudal society where you have masters and those who serve them, which is the ultimate end of unregulated Capitalism.