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#ThomHartmann blog: Banks Cashing in on Foreclosures

by Thom Hartmann posted Apr 23 2013 2:53PM

The banksters are cashing in off their own disaster.  The big banks are buying up distressed real estate by the boat load, and renting or selling it back to the public for huge profits.  And, in addition to making it even more difficult for economically-strapped Americans to become home owners, the banksters are increasing the likelihood of another Wall Street-fueled bubble that could crash our economy.  

According to the Washington Post, institutional investors account for as much as 70 percent of sales in some markets, and their purchases are increasing home prices in those areas.  Some investors are bidding on as many as 200 homes in a single day, crowding out individual buyers, re-inflating prices, and taking on a huge volume of inventory that can't be liquidized quickly if and when big banks get into financial trouble.  

Dean Baker, of the Center for Economic and Policy Research, expressed his concern about the risk the banksters are taking on.  He said, “This is frightening to me.  At some point the music stops.  The investors, if they get hurt, that is their problem...but invariably a lot of other people will get caught up in that.”  

Because of the risky trading practices and sub-prime mortgage scandals of the big banks, the taxpayers were forced to spend 700 billion dollars bailing out the banksters.  Now, they are putting our economy at risk again, and they're making huge profits off of the homes they foreclosed on.  And, taxpayers could be left holding the bag, when the big banks get into trouble again.

This practice must be stopped.  Let's break up the big banks, and stop the banksters from cashing in on the very disaster they created.

Listen to The Thom Hartmann Program 3 PM to 6 PM on WWRL AM 1600.
Filed Under :
Topics : Business_Finance
People : Dean Baker
04/23/2013 2:54PM
#ThomHartmann blog: Banks Cashing in on Foreclosures
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