Plotting a Securitization Sequel – Rental Payments

Now it is all clear…

They are selling the foreclosures in bulk so they can securitize the rental incomes!

This is not going to end well…


Plotting a Securitization Sequel

Four years after mortgage-linked deals played a starring role in the worst financial crisis in decades, banks and real-estate investors are at work on a new type of security tied to the housing market.

This time, financial firms are seeking to engineer deals backed by the rental payments of residents living in previously foreclosed homes.

In recent months, firms such as Colony American Homes and Waypoint Homes have snapped up houses in foreclosure and rented them. Backed by investment banks and credit-rating firms, these firms think they have spotted a new opportunity: Packaging thousands of those rental payments into securities and selling them to other investors, a process known as securitization.

Potential issuers, like Colony and Waypoint, are seeking to create and sell these securities to tap outside investors for capital they in turn can use to expand their businesses.

They aim to entice investors with returns that could look even more alluring should interest rates remain at or near historic lows.

Rest from the WSJ here…


2 Responses to “Plotting a Securitization Sequel – Rental Payments”
  1. If the. foreclosures were improperly done, which they would be since banks have no standing once they have securitized the loan, then everything that follows is also illegal. If this ever goes to the supreme court then 99% of all foreclosures, because they are fraudulent, should be overturned and the banks should be made to pay the bondholders their losses and also regurgitate the funds they fraudulently collected from AIG and other “credit enhancement” providers. These are also known as credit default swaps.

  2. Elise says:

    Yes, saw this a couple of years ago and told a couple of lawyers.

    Also saw similar firms buying up property for prices well-above-market-value and getting exemptions for property taxes…they then rented the properties. The tax break was under the guise of community improvement…blah blah blah.

    palm beach county

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