The collapse of the housing market, despite impoverishing the middle class and wiping out trillions of dollars of home equity and turning suburbs into slums, will assuredly turn out to be a great profit-center for the wealthy. So many subdivided, built up resources just sitting empty throughout America while local governments are starved for property taxes present just too many deals for investors to pass up. And the vultures have begun circling.
The New York Post is reporting that an undisclosed sovereign wealth fund (SWF) is interested in making purchases throughout foreclosure ravaged areas. SWFs are large investment funds owned and administered by foreign governments. One of the more publicized SWFs of the recent past is the Abu Dhabi fund which, in late 2007, invested $7.5 billion to prop up the banking corporations Citigroup.
After the real estate markets were pumped full of easy money that created massive malinvestment and drove prices to unsustainable levels, the market was crashed by the predictable, inevitable fallout from the subprime crisis and the subsequent drying up of credit. In communities throughout the country, wealth was created out of thin air, then pushed towards the local giant corporations, which were the only businesses to move into the mass produced suburbs.
Fraudulent bank loans were fed into the housing market, and the borrowers put the money right back into the corporations that get their financing from the largest banks and then privatize government services and outsource local industry and commerce. The result is a lessening of local government power at a strengthening of the corporate model. In suburbs with little or no community involvement to begin with, the conditions were ripe for the draining of the entire area's wealth.
Now, the same SWFs, financial investment firms, and large banks that financed homebuilders, home buyers, and corporations to build up and move into communities to piratize the incomes and assets of the residents need a method of dumping their dollar investments before the currency is further debased. They no longer need dollars to lend to homeowners who will never pay back loans, and are now focusing on simply buying up the actual real estate assets, currently selling at 60-80 cents on the dollar in some areas.
Investment banks made billions of dollars made from fees generated by selling mortgages to poor people and then made even more billions securitizing these loans and dumping them off on local government pension funds and other unsuspecting end investors. Now, flush with cash just after preying on the housing market, they are ready to trade in their worthless dollars for the land and properties of the American middle class, which has been hit hardest by the bubble's collapse.
For anyone who was wondering what would happen to all of those abandoned foreclosure properties without people to live in them, the answer is starting to become clear. Banks and wealthy investors will be the new feudal masters of the suburbs, using cash from the profits from the housing bubble, plus a few free handouts from the federal government in the form of banking and Fannie/Freddie bailouts, plus the destruction of any competition from actual people who might live in these homes due to the credit crisis.
The ForeclosureFish website has been created to provide homeowners in danger of losing their houses with relevant and important foreclosure help and resources. The site describes various methods that may be used to save a home, such as foreclosure refinance loans, mortgage modification, short sales, bankruptcy, and more. Visit the site to read more articles about how foreclosure works and how the process may be avoided before it is too late: http://www.foreclosurefish.com/
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