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Wall Streets New Financial Product


Free Spirit
Staff member
Over the last two years, private equity firms and hedge funds have amassed an unprecedented real estate empire, snapping up Spanish revivals in Phoenix, adobes in Los Angeles, Queen Anne Victorians in Atlanta, and brick-faced bungalows in Chicago. In total, Wall Street investors have bought more than 200,000 cheap, mostly foreclosed houses in some of the cities hardest hit by the economic meltdown. But they're not simply flipping these houses. Instead, they've started bundling some of them into a new kind of financial product that could blow up the housing market all over again.

Wall Street's Hot New Financial Product: Your Rent Check
I'm not sure what I think about this. I don't claim to be a whiz at investments and the housing market but to me it sounds like the price of housing is going to be falsely inflated and price a lot of people out of buying a house. When these people show up at these auctions for repossessed homes you won't outbid them. They are there to buy and have the go ahead to outbid the competition. I'm wondering if this does backfire on them if it could cause a melt down in the housing market again.