Couldn’t believe me eyes when I woke up to see this headline at the New York Post: LOST SOVEREIGNTY: Oil-Rich Fund Eyeing Foreclosed U.S. Homes. American mortgage brokers have been shopping– shopping for foreclosed American homes– on behalf of “sovereign funds” like Abu Dhabi, Norway, Singapore, and Kuwait. Unbelievable.
There’s a new land grab starting in America.
Foreign money, which up to now has focused its attention on investing in iconic commercial real estate – like Barneys New York and the Chrysler Building – is now moving to scoop up tens of thousands of discounted foreclosed homes across the country.
One sovereign fund, said to have earmarked $29 billion to purchase foreclosed residential real estate, recently hired a West Coast mortgage broker and is starting to search for bargains, The Post has learned.
The search, which is being carried out, in part, by Field Check Group mortgage consultant Mark Hanson, who was retained by the broker, Steve Iversen, is concentrating on single- and multi-family REO (real estate owned) homes, or homes that have already been taken over by the mortgagee.
Of course the American brokers are hush-hush about who they are working for.
A sovereign fund would have two distinct advantages over other investors – the depressed value of the US dollar makes the homes a bargain, and sovereign funds have deeper pockets.
So far, prices on bulk sales of REO properties vary based on location and are selling from 60 cents to 80 cents on the dollar. Hanson started out offering 40 cents on the dollar for about $2.5 billion worth of California properties owned by IndyMac and Washington Mutual but was turned down. The banks refused to comment.
Doesn’t anyone suspect in the slightest that the economy problems we’ve been having in this country have been manipulated to occur? Who is getting rich and who is benefiting from ALL this speculation. It would be one thing if a smattering of foreclosures were occurring– lots of homes foreclose, and lots of investors snap them up (see my post How to Create a Serfdom about that). But this is a HUGE, across-the-board failure in the United States (and in a few other countries). It is a purposeful devaluation of 1) the American dollar, 2) American ownership of property, 3) high taxation, 4) ethanol which has raised food prices and oil speculation which has raised gasoline prices and everything else, 5) the inability for Americans to make ends meet and make those home payments.
And when we have a crisis like this, who gets bailed out? Not the American taxpayer! Our country is being sold out right from under us.