Government sells people’s homes to conglomerates at firesale prices

NEW YORK (RealMoney) — The largest transfer of wealth from the public to private sector is about to begin. The federal government will be bulk-selling the massive portfolio of foreclosed homes now owned by HUD, Fannie Mae and Freddie Mac to private investors — vulture funds.

These homes, which are now the property of the U.S. government, the U.S. taxpayer, U.S. citizens collectively, are going to be sold to private investor conglomerates at extraordinarily large discounts to real value.

You and I will not be allowed to participate. These investors will come from the private-equity and hedge-fund community, Goldman Sachs(GS) and its derivatives, as well as foreign sovereign wealth funds that can bring a billion dollars or more to each transaction.

In the process, these investors will instantaneously become the largest improved real estate owners and landlords in the world. The U.S. taxpayer will get pennies on the dollar for these homes and then be allowed to rent them back at market rates.

On Wednesday, the Federal Housing Finance Agency (FHFA), the Department of Housing and Urban Development (HUD) and the U.S. Treasury Department issued a Request for Information (RFI) concerning the disposition of the inventory of foreclosed homes owned by the federal government.

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3 comments for “Government sells people’s homes to conglomerates at firesale prices

  1. David
    August 30, 2011 at 8:57 am

    Quelle surprise!

  2. August 30, 2011 at 10:54 pm

    There’s no such thing as a free lunch.

    Yes, some people have worked hard for their mortgages from banks but others took advantage of a (seemingly) good deal with their notional mates Fannie, Freddie and HUD.

    Who’s flippin’ now? A sad situation but a cautionary tale.

  3. Sackerson
    August 31, 2011 at 2:29 pm

    I didn’t think they’d have the nerve, or be allowed to.

Comments are closed.