Who’s Minding the Store?

Could our real estate industry be in danger of facing another 2008-styled collapse?

We are still recovering from a lending system that saw banks like Countrywide package mortgages together and sell them to investment groups who sold them again and again until nobody knew who owned the loan.

It was the unregulated sale of these residential home assets to people who knew very little about the market and clearly didn’t manage their loan portfolio which ultimately hurt America.

Could history be repeating itself?

Banks are now selling large portions of their REOs in packages to hedge funds and private equity groups that know very little about the real estate marketplace. Even though they are now packaging homes instead of loans, doesn’t this sound familiar to you?

Shouldn’t banks put their REO inventory in the hands of the people who know the most about local real estate – agents and brokers?

Sure, average home prices in California are rising – ever so slightly – because inventory is at an all-time low, in part because millions of REOs have been pulled off the market and out of the hands of agents and brokers. Could this just be a short-term fix that will create another long-term problem?

What do you think? Give us your feedback or tweet your comments with #REInsider.

  • Nancy

    I do think this is a big problem for the housing market. It seems to me that everything this administration has done to “help” the market is the exact opposite of what it should have done. I know the artificial upswing in prices is due to lack of inventory. (supply and demand) There
    is a demand for homes and we could actually have a smooth & steady “real” recovery if the banks were allowed to responsibly offer their REO’s to the public for sale instead of the Wall Street investors and Hedge fund gluttons. Right now, the GOV is sweeping the mess under the carpet to lead the public to believe “it’s all fixed!”

  • The whole premise of this discussion is wrong. Real estate did not collapse because of who owned the mortgages. It collapsed because loans were made to people who could not pay them back and at values that were unsustainable.

  • Mark

    I think we should do something about this before it is too late

  • This is an obvious concern for anyone with common sense. What do you suggest be done about it?

  • I am absolutely positive the banks have reduced reo listings to
    manipulate prices a bit up to keep their current Federal Government
    Cartel in their pockets: Obama, Geithner, Demarco, Holder, Bernake,

    have EVERY intention of stopping loan mods and short sales after the
    election, and foreclose rampantly and fiercely to take the rest of the
    40 million homes on which they did false, predatory and securitized

    So if you are not facing foreclosure and the boot out now, get ready. you will.

    has gotten the fed ready to buy 40B mortgage bonds per MONTH from the
    banks so they can fraudulently foreclose, sell our homes in bulk to
    hedge funds backed by the banks (more wholly owned bank subsidiaries
    which are finally ready to rock and roll), then securitize the rental
    contracts and sell to the fed, all at taxpayer expense, and end up
    owning 30-50% of the homes in this country as corporate landlords.

    check out the facts: http://www.HOFJ.org. help me stop them.

    Watch my 1m video on Foreclosure Town Halls, and call me to get one scheduled in your area. We have to stop them NOW. Help us.