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There's been talk of big apartment complexes, bought by private equity firms, being at risk for mortgage defaults, after the buildings' new owners had unrealistic expectations for rent increases. Now, the NY Times reports that Senator Charles Schumer wants to make sure certain buildings stay affordable given that 60,000 lower income residents may be affected. He also wants the SEC to investigate the loans, "The entire predatory equity enterprise is a house of cards built on a foundation of fantasy and greed. The whole thing collapses when there is any depreciation, or even a leveling, in the property’s value, which is the reality we now face. You would think these deals would’ve stopped a year ago, but they are still going forward."
Schumer on "Shoddy Lending Practices," Apartment Buildings in Jeopardy
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Those Mariachi guys piss me off when you enter a mostly silent subway car.
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We need this correction. Those pols are simply trying to keep the tax rolls fat through inflated property values.
Let the bubble deflate.
They're doing a pretty good job of it in New York City. I am still seeing plenty of rental properties priced so that no one could possibly stay afloat if they bought them and rents did not rise quickly (which they show no signs of doing). This in spite of the bear market, bankruptcies, bailouts, layoffs. I guess they are waiting for bundles of freshly printed money to come down from Washington; the theory there seems to be that the bubbles should be reinflated. If so, look for radical inflation in the not-too-distant future. If you have savings or a fixed income, you'll be screwed. But people who have savings or pensions are suckers anyway, right?
they should really stay out. look at they have done so far? damn politicians and their wallstreet friends.
let the bubble pop and let the prices go to real levels. so people would buy within their range.
Why renegotiate a bad loan with a predatory landlord that speculated on rising rents? Let them go under, for christsakes, and have these properties change hands until a fair value is finally established. The rents will stay ridiculously high until the last greedy claw has been severed from those keys.
Schumer doesn't even understand the crisis, yet doles out caustic comments. He disgusts me.