Certified Forensic Loan Auditors, LLC

 
  Upcoming Classes

Search CFLA's Article Archive:

Wall Street's New Trillion Dollar Playground, the Securitization of Rental Homes

worldpropertychannel.com | January 31, 2014

By Michael Gerrity

The securitization market involving debt tied to single-family homes is reemerging as a hot topic in Wall Street, but the source for the debt is different this time around.

A Wall Street estimate says potential financing opportunities for the new securitization market are as high as $1.5 trillion.

The new industry would sell bonds to investors all over the world from debt tied to a growing single-family rental market.

A growing number of large and private investors are purchasing single-family homes in bulk and renting them. This is creating an opportunity for banks and investors to buy into the market.

American Homes 4 Rent is the latest company making a move in the emerging market. The company announced at a conference its plan to sell securities tied to $500 million of debt, according to The New York Times.

"The investment and lending opportunities are immense and perhaps just beginning," Jade Rahmani, a real estate analyst with Keefe, Bruyette & Woods, wrote in a recent report.

Private equity giant Blackstone Group, the largest owner of single-family homes in the U.S., became the first to sell single-family rental securitization last fall.

The REO-to-rental business has attracted institutional investors in the wake of the market collapse, with funds and REITs spending more than $20 billion to purchase as many as 200,000 homes.

Blackstone has set up its own lending arm to lend to other buy-to-rent landlords, as small investors may not be able to acquire credit.

Last November, Starwood Property Trust announced it would spin-off its single-family business into a separate REIT to become one of the largest publicly-traded single-family property owners.

This new Wall Street market is creating concern among economist and members of congress members, who worry of another credit bubble.

"Proper oversight of new financial innovation is key to ensuring we don't go down the same road of the unchecked mortgage-backed security and create an unsustainable bubble that will wreak havoc when it bursts," Representative Mark Takano, Democrat of California, said in a letter to the House Financial Services Committee last week.

The previous credit bubble burst included defaults and failures from mortgage holders, lenders, loan insurers and hedge funds in a system dubbed "financial weapons of mass destruction" by business magnet Warren Buffet.

Before the market collapse, almost anyone could get a mortgage from a bank with little to no credit. The bank would then sell the mortgage-backed securities to pension funds, which felt safe with the loans because of the backing of insurance companies like AIG with a product called the 'Credit Default Swap', which in effect was a form of insurance on the invest itself. That is how many Wall Street banks were able to sell hundreds of billions of dollars' worth of high-risk investments to usually risk-adverse institutional investors worldwide. And the entire deal structure was based on the premise that housing values would always go up, and homebuyers would continue to pay their mortgages.

When the economy turned sour in 2008 and mortgage payments stopped, what ensued was a snowball-effect collapse resulting in the recession.

Many years later, the economy is recovering, the housing market is rebounding, but lending remains tight. This has led to the rental market growth and a new way for Wall Street to make money.

With the foreclosure industry dropping nationwide, investors are rushing to get into the business.

"We have been very pleased with how this turned out," American Homes 4 Rent executive director, Michael J. Burns, told The New York Times, while acknowledging it's sometimes "heart wrenching" to acquire homes that families have lost to the bank.

"Some other family is going to move in and make it their home," he said.

 

Back to January 2014 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

SEE BELOW- http://www.certifiedforensicloanauditors.com

Call us toll free at 888-758-2352

Bookmark and Share
spacer
Facebook Like us on Facebook
Twitter Follow us on Twitter
YouTube View our YouTube Videos
LinkedIn Connect to us on Linkedin
 
BBB Logo

 

spacer
Contact us or view our Sample Documents & Audits by completing the form below.

  • Reload
  • Should be Empty:




 

DVD Sets Only $99

 

FREE Mortgage Fraud Analysis

 

Order Cutting-Edge Services Now

 

Quiet Title Packages from Licensed Attorneys

 

Affiliate Services

 

CFLA Sponsored Attorney Links

 

Take-Home Education Package

 

ALB Law Firm

 

Advocate Legal

 

The True News Network

 

Rubenstein Business Law

 

Atighechi Law Group

 

Scunziano & Associates

 

Get Certified to Perform Mortgage Securitization Audits

 

CFLA Training Academy

 

Expert Witness Services

 

Cutting Edge Expert Securitization Reports

 

CFLA Credit Cards

 

Breaking News

 

Letters to the Editor

 

CFLA Weekly Newsletters

 

Code of Ethics

 

Testimonials

 

Instructional Videos

 

Job Opportunities

 

License Opportunities

 

MARS Rule

 

Product Samples

 

Resource Links

 

Servicer Information

 

Foreclosure Laws

 

REST Report

 

Quiet Title Packages from Licensed Attorneys

 

Advertise on CFLA

 

Advertising Space: Mortgage Securitization, Quiet Title

 

Certified Forensic Loan Auditors, LLC
13101 West Washington Blvd.
Suite 444
Los Angeles, CA 90066

Toll Free: 888-758-CFLA (2352)
Mobile Users: CLICK TO CALL
info@certifiedforensicloanauditors.com

   
 
CFLA IS NOT A LAW FIRM AND DOES NOT PROVIDE ANY LEGAL ADVICE. CFLA DOES NOT OFFER FORECLOSURE CONSULTING OR FORECLOSURE RELIEF
SERVICES. CFLA DOES NOT OFFER OR ASSIST WITH ANY LOAN MODIFICATION SERVICE. CFLA ALWAYS RECOMMENDS THAT CLIENTS RETAIN COMPETENT COUNSEL IN THEIR RESPECTIVE JURISDICTION. CFLA HAS A FREE PROGRAM TO REFER CFLA CLIENTS TO LAW FIRMS IN NEARLY EVERY STATE AND CFLA
DOES NOT CHARGE OR OBTAIN REFERRALS FEES FOR THESE SERVICES. SERVICES NOT OFFERED TO RESIDENTS OF THE STATE OF NEVADA.

 
Home About Us Privacy Policy Terms of Service Disclaimer SERVICES Careers Contact Us
 
COPYRIGHT © 2007-2016 Certified Forensic Loan Auditors ™ All rights reserved