What do we do about renters' debt?
Comments
-
Sure, that's the principled libertarian take on the matter.doogie said:If you’re a leveraged real estate “Investor” who doesn’t have the ability, knowledge and/or resources to weather the storm, whatever the cause, you give the collateral back to the entity that loaned you the money and everyone moves on.
Solved.
Next?
But I'm willing to venture that most of us here, across both political aisles, have seen the movie where those very same banks that loaned the money were previously bailed out to the tune of hundreds of billions of taxpayer dollars. So if the people concur, why not make the banks eat this one? Give the little guys a small, one-time win before we return to our previously scheduled big bank socialism. Jamie Dimon might not even notice. -
A lot of investors got burned during 08 period so not that popular of an asset class. Banks still make them for some institutional investor that have tolerance for that type a risk.creepycoug said:
Stimulus ain't gonna help shit. If I'm renting and can't be evicted, and I'm broke, I'm using that $$ on food and keeping the heat on. And even if I did use it on rent, $1400 buys us how much time?GreenRiverGatorz said:https://gothamist.com/news/nyc-tenants-owe-billions-unpaid-rent-what-happens-now
This talks about NYC specially, but it's a microcosm of the larger script that we all saw coming a year ago, and it's continuing to play out all over the country. Locality/state forces lockdown, low income service workers get fucked the hardest, rent doesn't get paid, landlords get behind on their mortgages. We've now pit the low income renters versus what's often a working class landlord. Not to say that mildly well-to-do folks with investment rental property are undeserving of empathy either.
Theoretically there's billions of dollars lined up from Biden's stimulus to pay the overdue rent. But we're not dumb observers of history here, and we know a significant portion of these low income renters won't get access to funds for some varying reasons of shitty bureaucracy. And they'll get evicted. And they'll become homeless. And they'll end up having been fucked by forces way out of their control. Such is the story of the underclass.
Meanwhile the stocks of the lending banks of the aforementioned mortgages have exceeded their pre-pandemic levels. SBC is vesting like nothing happened. They still laugh over $70 martinis about the bonuses they received in 2011 after a well-earned recovery propped up by Uncle Sam. Karmic justice, or any sort of demonstration of morality by the universe would say these fat cats can hold the bag just this once. I don't know what the exact combination of legislative or executive levers the feds could pull is, but I'm sure there's an avenue for them to take that'll ensure renters and landlords both come out whole at the expense of the billion dollar banking titans.
But I don't think that's in the script.
I have lost track of how popular mortgage backed securities are. Are banks still bundling them and selling them to wall street who sell them to fixed income investment streams? Is that the next shit balloon that is set pop?
One of the reasons I've not jumped on free money and gone @pawz with a better house is because the cheap mortgage isn't going to take the sting out of overpaying for something by a few hundy if the 2008 housing crash is about to happen. I'm kinda worried about that. The housing shoe has to drop sometime. -
Nnnnooooooo, ya think? and I suppose “Banks Secure Advantages From Politicians” is a headline you were sure we’d NEVER readGreenRiverGatorz said:
Sure, that's the principled libertarian take on the matter.doogie said:If you’re a leveraged real estate “Investor” who doesn’t have the ability, knowledge and/or resources to weather the storm, whatever the cause, you give the collateral back to the entity that loaned you the money and everyone moves on.
Solved.
Next?
But I'm willing to venture that most of us here, across both political aisles, have seen the movie where those very same banks that loaned the money were previously bailed out to the tune of hundreds of billions of taxpayer dollars. So if the people concur, why not make the banks eat this one? Give the little guys a small, one-time win before we return to our previously scheduled big bank socialism. Jamie Dimon might not even notice. -
The banks are going to eat all right
Take back the property and sell it again -
Jamie Dimon and every other banker will fuck you in the ass and twice on Sunday if they catch you sniffing around the moral hazard garbage bin.
-
Nothing changed with themdoogie said:Jamie Dimon and every other banker will fuck you in the ass and twice on Sunday if they catch you sniffing around the moral hazard garbage bin.
-
I generally can't get too worked up about the banks for a couple of reasons:
1. I stand to be corrected, but they never get us? into anything we? don't want to get into;
2. While I agree with your stance on the bailout whole heartedly, nobody has ever shown me the way for how we function as a society without them; and
3. Remember that most of us are investors in those banks, so I'm generally not in favor of kicking myself in my own ass.
Re the bailout, in particular, I hear you. I think the banks need to be regulated. My legal practice before going in-house involved A LOT of securitization work, particularly mortgage loans. I had a healthy banking practice. Part of my solution then to the problem wound up actually happening with post-2008 legislation, whereby the Tier 1 capital requirements for chartered banks was set and periodically checked by regulators. The other part I don't think ever made it into the DC sausage making - can't remember or didn't care then because I went in-house shortly after the pop - and that is, make banks hold and service a significant % of the loans they originate for a minimal period of time. No selling off the servicing and no selling off the loan. Yes, I know that will hamper liquidity to some degree. But if the banks can underwrite shit and sell it to someone else who is willing to lie to investors, then we're going to be back to 2008 again.
Executive summary is, while I'm not generally a huge regulation person, I recognize relying on the market to solve bad actor problems has some "it's too late" limitations. Banking is one such area IMO. Nuclear waste is another. Regulate them well so you don't have to bail them out.
But fucking them for the morality of it ... I can't get there. -
Somebody is getting fucked either way - the question is who do you want to steer the flaming dump truck towards.creepycoug said:I generally can't get too worked up about the banks for a couple of reasons:
1. I stand to be corrected, but they never get us? into anything we? don't want to get into;
2. While I agree with your stance on the bailout whole heartedly, nobody has ever shown me the way for how we function as a society without them; and
3. Remember that most of us are investors in those banks, so I'm generally not in favor of kicking myself in my own ass.
Re the bailout, in particular, I hear you. I think the banks need to be regulated. My legal practice before going in-house involved A LOT of securitization work, particularly mortgage loans. I had a healthy banking practice. Part of my solution then to the problem wound up actually happening with post-2008 legislation, whereby the Tier 1 capital requirements for chartered banks was set and periodically checked by regulators. The other part I don't think ever made it into the DC sausage making - can't remember or didn't care then because I went in-house shortly after the pop - and that is, make banks hold and service a significant % of the loans they originate for a minimal period of time. No selling off the servicing and no selling off the loan. Yes, I know that will hamper liquidity to some degree. But if the banks can underwrite shit and sell it to someone else who is willing to lie to investors, then we're going to be back to 2008 again.
Executive summary is, while I'm not generally a huge regulation person, I recognize relying on the market to solve bad actor problems has some "it's too late" limitations. Banking is one such area IMO. Nuclear waste is another. Regulate them well so you don't have to bail them out.
But fucking them for the morality of it ... I can't get there.
The government already told at-risk renters to get fucked - you're losing your job because we're mandating closures. So the regulation has already happened one way or another, that cat is out of the bag. So we can close our eyes and say now is when the free market gets to start operating again, or we can stop the charade and admit that we're picking the winners and losers one way or another. I've always had a soft spot for the little guy being the benevolent soul I am, so I know who I'm rooting for. -
Whaaaaaaa
You stepped in the Box, swung for the fences and struck out. It happens. The sun will come up tomorrow.
Next time, develop your contingency plans around a wider swath of hypothetical issues.
The happy couple buying your house at auction win. -
Genuinely have no idea what you're babbling aboutdoogie said:Whaaaaaaa
You stepped in the Box, swung for the fences and struck out. It happens. The sun will come up tomorrow.
Next time, develop your contingency plans around a wider swath of hypothetical issues.
