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.