- 07/07/2015 by Linda Perry (WBAI News)
Low and moderate-income families in Nassau and Suffolk County, as well as other communities across the country, are struggling to afford housing. Instead of being rescued when families run into financial trouble, people lose their homes.
Delinquent mortgages get bundled into large pools. They go onto the market place to be bought up by hedge fund billionaires and private equity firms.
Ismene Speliotis, executive director of Mutual Housing of New York said, “Fanny and Freddy, who hold 50% of the mortgages in this country and a lot of mortgages in low and moderate-income neighborhoods with people of color, are actually bundling these notes where people are having trouble and not paying, bundling them up and not selling them to the people who are at the conference today.”
The conference was a recent black tie hedge fund awards banquet hosted by Business Insider. It was at the Time Warner Center and closed to the press.
Outside the conference, a protest ensued with Hedge Clippers and New York Communities for Change over what billionaires are doing to New York’s housing stock.
Renata Poomarol, of New York Communities for Change, said, “We're here to call out hedge funds for buying up the homes in our communities and basically extracting wealth from low and middle-income communities.”
She continues, “We want to see that they don’t buy out our mortgages—that they don’t buy out foreclosed homes to make profits. They should be taxed heavily.”
According to a new report by the Center for Popular Democracy, hedge funds and private equity firms are getting big discounts when they buy the rights to collect homeowners’ mortgage payments. They get discounts from the Department of Housing and Urban Development (HUD) and from Federal Housing Finance Agency (FHFA), the two government agencies that have refused to give similar discounts to homeowners that aren’t billionaires.
In Nassau and Suffolk Counties and Upstate New York, neighborhoods end up with zombie homes. “Sometimes when the investor purchases these homes, they go through the process, evict the homeowner, and allow the houses to fall into disrepair,” said Speliotis. “Nobody cuts the grass, nobody repairs the house, and then not only is that home owner not there, not only is that house in disrepair, but the neighborhood and all of the homes in that neighborhood are negatively impacted. So you can imagine the kind of repercussions, particularly in neighborhoods that may already be trying to break out and stabilize. This would have a very, very negative impact.”
According to Speliotis, mortgages don’t need to be pooled into large bundles where only the very, very rich can buy them.
“We would actually say that they don’t need to be the ones buying. There are other entities. It’s set up right now so that they’re the only people who can buy because these pools are sold for hundreds of millions of dollars. If you broke them down so that you had a neighborhood in Nassau county, or Nassau county specific, then the county could work with nonprofit partners to come in and raise the money to buy them and you wouldn’t have to do what’s going on right now.”
For more on how hedge fund managers and Fannie Mae and Freddie Mac are selling neighborhoods to wall street, go to hedgeclippers.org.
LP WBAI News, NY