How American became a nation of renters [INFOGRAPHIC]
This infographic came from PM Guardian.com
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[INFOGRAPHIC]: How Americans Became a Nation of Renters
How American became a nation of renters [INFOGRAPHIC]
This infographic came from PM Guardian.com
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I worked and was a part of this field since 1984. I was taught well and had to learn about the past when I got in.
My folks, first house in 1951: $10,900 with an acre and a half.
Rent stats for Memphis report 50%. This is conservative. Memphis is a city that is steeped in poverty. It boomed with homeownership in the early 2000s now to be decimated in foreclosures, shadow inventory and derelict housing no one is responsible for, not the banks, homeowners who have moved on after losing their homes. But the house remains, some in shambles, banks hold tons of these houses as shadow inventory. They have forced the homeowner out after default. Enter the era of multi-parcel dumping of these houses to investor buyers 10-20-30 houses at a time. We now have global buyers snapping up houses by the 50-100 parcel package. Maybe they are laundering outside profit with controlled losses in the housing industry?. This takes hard money and cash purchasing to make work but follow the money and you will see two types of investors. The large purchaser buys a mega pack of houses no one wants. He pays too much for them but not obscenely not calling undue attention. He parcels these houses out to rehab management companies that do a turnkey operation of rehabbing the houses and targeting small investor buyers who can pay cash or private financing to purchase a renovated house, leased and managed without having to handle the restoration or leasing personally. All one has to do is put their cash into the bank, right?
All that glitters is not gold.
Yes values are running up modestly as the market will bear. no need to appraise or compare individual REOs selling for half as much, unrenovated in the same block. Does the cash flow materialize as promised? People have to live somewhere. A similar house selling to a homeowner occupant would have a PITI lower than the $900-$1000 it takes to rent one of these renovated specials. To fill rents that high management companies have to take anyone breathing that can pay down. [sound familiar] But those who live in these high priced rentals can’t qualify to buy the same house with a $600-800 note [that includes PITI]. When they find it impossible to continue paying, they move on, often leaving the house in poor condition or defaulting and having to be evicted. The little investor must continue to pay fees for repairs and management in vacancy periods. He pays insurance and taxes. It pays to do due diligence if you are going to invest in this turnkey type market. What seems like a fantastic buy from a California or Florida viewpoint for a 3/2 house in a distribution hub area might not be all its cracked up to be. You could have problems dumping it in the future even for what you paid for it. Re-sales to homeowner occupants are almost impossible.. Other saavy investors are not looking to pay prime price.
Just sayin’ . . . .everything is temporary!
Good post.
I agree, excellent post!
Bobbi, I also agree with you, but, you are still too kind. When Robosigners can forge signatures of Citizens and create false notes unpunished with the company OK…..
morals went out the window.
In non-judicial states, which is most of them, banks have gotten by with fraud and forgery for years. The very creation of MERS flaunts most of our land laws, yet the courts protect that and other methods of circumventing the law. Too often courts in both types side with bank and lawyers who represent them because they hold the power and money. When the judicial system ignores law and worse rewards it, we have lost our rights. .
Case in point, TN is a non-judicial state. My husband and I purchased a home, assumed the equity from a prior homeowner who held the lien. At the closing table, the lienholder personally appeared. She signed an assumption statement allowing my husband and I to assume the note. After a few years, we gave the house to our son. At his closing the lienholder again signed an assumption statement for our son and his wife, Both assumption statements were duly recorded.
Son and wife separate and wife decides to move in with boyfriend. Wants to sell house. She goes to the lienholder’s heir, lienholder has died by this time. They conspire to foreclose and the wife stops paying the note. Unknown to the son, who lives in another state, the lienholder hires a lawyer to file as her trustee of the deed. He advertise the trustee sale under the original buyer’s name and forecloses without notification to my son, who learned of it after his wife moved out of the house.
The lien on the house was a 20 year loan and this occurred in the 19th year of the loan or 2013, which was set to pay off in 2014. The deal reeks of fraud and misrepresentation, known to the trustee lawyers, because he was the same closing attorney that had the assumption statement recorded in our sale to our son. They ran it intentionally to prevent our son from challenging and preventing the foreclosure.
This was a crooked deal with all parties knowing it was except my son. Fraud by attorney, fraud by lienholder and fraud by wife, all conspiring to defraud the IRS who held a tax lien. walks away, probably with a few bucks in hand from the lienholder’s heir who got a free house minus her lawyer’s fees. They even duped the IRS out of recovery. The transfer occurred for the value of the remaining lien, which at one year from paying off. was minuscule.
Fraud is everywhere.
Being a baby-boomer and also being in the lending industry for over 44 years, this infographic is the best! I applaud the creator/author for the amount of time, effort and figures. I remember my parents, both middle class workers, who purchased their first home for $12,000 (not new home). We sold our car for the down payment and used the bus system for travel. I follow this infographic down the years as I remember all that took place from the 50’s forward. I have always said with all the advancements we have made, with all the technology, we were still a better country from Post War to the 70’s. Once we hit the S&L crisis, it all went downhill from there. The gov’t just kept putting more and more bandaids on problems as a fix. Now, here we are back to the place before the Great Depression. Not too many people left to remind us of those times, but I have pics of my father as a small child where he pulled a wagon through town and sold milk in a bottle, cheeses and homemade breads. The economy is NOT in good shape, unemployment is NOT getting better, personal spending is NOT up and YES, we are being brain washed into thinking as such. Watch out, the bomb will have to drop eventually!
Bobbi, I don’t know you and you don’t know me. It seems we are almost exact in our comments to this graph that was created. I hope and pray that Washington DC does two things to fix this stagnation of a nation;
1) ask “retired” bankers and finance men to come to Washington for a
“HOW TO” rebuild-powwow.
2) Washington D.C. needs to hang up there hats in career mortgage banking.
It didn’t work.
Thanks for the uplift that SOMEONE out there thinks like me. I agree with your solution, but don’t limit it to the ‘retired’ portion of the industry. I am still working as this last ‘collapse’ pretty much delayed my plans for retirement. We need sooo many changes in the financial sector as a means to correct sooo many wrongs and bandaid fixes that didn’t work especially since 1999. I actually warned my own boss of a pending melt-down back in 2003. He didn’t pay attention then. Now, he asks me to make sure he listens the next time I try to warn. I still believe that if we don’t start fixing now, we will definitely be headed for far worst in the next 18 months.
The only reason I say “retired” is because these men don’t have the same interests or conflicts anymore in this business. I can’t say I trust many people anymore in banking. I am 49 years old. When I closed my company I went to work for Mortgage IT/Deutsche Bank. I also warned them of the possible collapse because of the crazy loans. At various meetings I would bring this topic up softly and they all looked at me like I was the anti-Christ. They told me “don’t be a dinosaur, it’s not your money so go back to work”
wow.
This was a great chart even for the average layman to comprehend. I worked and was a part of this field since 1984. I was taught well and had to learn about the past when I got in. Experiencing this ridiculous ride along the way with all its changes and seeing it all here on chart is pretty amazing but a little overwhelming. The part that scares me the worst is the chart stops at 2011 and it’s 2015. It doesn’t show where we are.
I know where we are. Unfortunately this topic is a little like the UFO’s. Most of the public will talk about them but most are scared out of their friggin minds and prefer to go to church or take the ostrich approach.
I like to stay in touch with reality. I would suggest that the rest of the public keep their heads in the sand for the next part of the chart. They left the last part of the chart off for a reason. Judging by what I lived through for three decades, What I learned and what I’m seeing now on the front lines, This U.S. economy is the biggest Ponzi Scheme in world history.
Thats, what you will read on the next piece of the chart in 2021 (unless we do something)