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Wall Street Big Wigs Buying Up Foreclosures

by Shilpi Paul

Wall Street Big Wigs Buying Up Foreclosures: Figure 1

Fannie Mae’s plan to fill foreclosed homes with renters is getting some support from Wall Street’s high rollers.

The Wall Street Journal is reporting that a few firms are planning on buying up foreclosed properties from Fannie Mae. Most of the homes involved in this deal are currently filled with renters; the deal will stipulate that investors keep renting out the properties for a few years.

Amherst Securities Group, Paulson & Co. and a fund run by mortgage-bond pioneer Lewis Ranieri, among others, are considering making bids. From The Wall Street Journal:

The sale consists of 2,500 homes divided into eight regional pools, ranging from 572 properties in Atlanta to 99 in Chicago. The total current market value is $320 million, according to an offering document prepared by Credit Suisse, which is advising Fannie.

“We’re investing a lot of capital, a lot of time, with the expectation that this is a very small beginning to a very big movement,” said Sean Dobson, CEO of Amherst. Last summer the firm won 50 properties auctioned by Fannie in Dallas and confirmed that it plans to bid on some of the pools up for auction now.

We’ll see how these bids progress in the coming months.

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This article originally published at https://dc.urbanturf.com/articles/blog/wall_street_big_wigs_buying_up_foreclosures/5302

5 Comments

  1. aj said at 9:48 pm on Monday March 19, 2012:
    so let me get this right: wall street makes a killing by capitalizing on bundled mortgages that were issued to people who couldn't afford them. and now that those people ave lost their homes, wall street can make another killing by buying up the foreclosed homes on the cheap and renting them out or re-selling them later. is that right?
  1. BW said at 4:31 am on Tuesday March 20, 2012:
    +1 to AJ's comment.
  1. RTM said at 1:37 pm on Tuesday March 20, 2012:
    Concur with AJ's comment. When is this ridiculousness going to stop? Haven't the tax payers been screwed enough?? Bottom feeding sharks like Paulson & Co, Amherst and Goldman Sachs should be put out of business. Disgusting to say the least!!
  1. andy2 said at 12:41 am on Wednesday March 21, 2012:
    AJ you could also complain that they aren't lending so they are making it hard for others to buy the foreclosures - thus creating a market where they are the only buyer. However, you could also look at it like this (ever the optomist so bear with me) - these investors own the mortgages on homes in Atlanta and Chicago - because of foreclosures those investments are not doing well. So to prevent further eroding of their portfolio they are buying adjacent properties in the hopes of improving neighborhood conditions. If all works out this will stop the continual decline in property values and start to rebuild equity (for both banks and homeowners). The will all the investors to see a positive return on their initial investment (mortgages) and their secondary investment (foreclosed homes). This has the added benefit that Joe and Jane homeowner who are underwater will see conditions improve and hopefully begin to regain equity as these vacant homes begin to generate income and attract investment. Yes Wall Street was greedy with the mortgage backed securities - but they were not the only ones - homeonwers, flippers, real estate agents... are all guilty. This is actually a positive move that could help to turn around the housing market. In this case - Wall Street is begining to clean up its own mess.
  1. fashion blog said at 2:36 pm on Saturday April 21, 2012:
    +1 RTM comment it is truly ridiculous and needs to stop. we tax payers have payed enough!!!

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