Picture Credit: Krakow 81
Will Oil Rich Funds buy Foreclosed American Homes as OPEC Countries post highest profits in 2008?
The Buying of America. Whether you realize it or not: There’s a new land grab starting in America.
Foreign money, which up to now has focused its attention on investing in iconic commercial real estate – like Barney’s New York and the Chrysler Building – is now moving to scoop up tens of thousands of discounted foreclosed homes across the country. Check out this earlier CG post.
“One sovereign fund, said to have earmarked $29 billion to purchase foreclosed residential real estate, recently hired a West Coast mortgage broker and is starting to search for bargains, The New York Post has learned.
The search, which is being carried out, in part, by Field Check Group mortgage consultant Mark Hanson, who was retained by the broker, Steve Iversen, is concentrating on single- and multi-family REO (real estate owned) homes, or homes that have already been taken over by the mortgagee.”
Sovereign Funds Will Buy The U.S. Homes
Neither Iversen nor Hanson would disclose the name of the client, but sources told The Post “it’s a sovereign fund.”
A Sovereign Fund Has Major Advantages:
A sovereign fund would have two distinct advantages over other investors – the depressed value of the US dollar makes the homes a bargain, and sovereign funds have deeper pockets.
The sovereign fund of Abu Dhabi, for example, has a reported $875 billion in assets, while Norway has $391 billion, Singapore has $303 billion and Kuwait has $264 billion in their sovereign funds, which are funded by proceeds from oil sales.
Houses selling for $1.00: Check this out
Foreclosures continue to rise: Check this out
Lenders that made loans to unqualified buyers during the height of the sub prime market now find themselves the owners of whole neighborhoods of vacant, deteriorating homes.
One dollar can get you a large soda at McDonald’s, a used VHS movie at 7-Eleven or a house in Detroit. The fact that a home on the city’s east side was listed for $1 recently shows how depressed the real estate market has become in one of America’s poorest big cities and it still took 19 days to find a buyer.
What happens after the houses are sold and purchased with foreign sovereign funds?
Picture Credit: Ginger
The foreclosed homes will be purchased by the foreign sovereign funds, when rented or sold, will mean more American dollars going to the rich oil funds. The Selling of America.
Source: New York Post