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Originally Posted by itshotinvegas
There are compelling points on both sides of this...
In order for Black Rock to do this, there has to be willing sellers. If you prevent it from occuring, you are disenfranchising current homeowners.
Billionaires are doing this with farmland too.
I would think there can be antitrust legislation that could deal with this.
I would agree if not for the fact that we know that what they are doing is creating a short term bubble where they can control costs over their portfolio to artificially inflate it (bubble) and then when they eventually sell and pull out of the market and that bubble bursts, they will get government bailouts to socialize any losses while home owners AGAIN are left with wave of home forfeitures due to equity erosions an inability to finance.
I am absolutely convinced the lessons learned by these groups post 2008/9 is that on top of gov'ts lack of hesitation to jump in and save them from losses, they got a mostly unexpected huge bonus.
That bonus was the absolute forced wave of foreclosures leaving very few buyers in the market by contrast, resulting in being able to buy mass amounts of homes massively below market value simple due to lack of demand.
They look at this as a short term cost to gain a long term win, as eventual buying comes back and they mark up their properties and make huge profits.
If they did not realize that the first time I guarantee you they are banking on this, this time seeing it as a win/win. If the market only goes up they win. If it crashes, they win.
Steve Mnuchins firm did just this making massive profits and grossly the US gov't provided them downside risk guarantees to do so. Meaning if they lost money on the homes and mortgages they bought the gov't was protecting their losses.
The gov't justified this saying 'liquidity' was necessary so these properties could sell and turn over. But fact is if the gov't is going to de-risk the buying of these mortgages and properties for Mnuchin, they could instead just guarantee the mortgages and properties with the small local banks who held the mortgage to keep the people in their homes.
With a guarantee those local banks can easily raise extra liquidity.