patrick.net

But renters are lower class credit risks compared to homeowners, right? Homeowners get lower interest rates.

We all saw what happened the last time Wall Street securitized housing. They tried it with the stellar homeowners crowd and their mortgages, and we all know how that turned out.

So why would it be any different with the lower class rental crowd?

Where's the hedge fund I should be putting my money in?

Pretty sure I read one of the big rental companies recently posted a $14M loss last quarter. There's no way this could go wrong.

robcolorado says

Pretty sure I read one of the big rental companies recently posted a $14M loss last quarter. There's no way this could go wrong.

Do you have a source for this ? Was it in a particular city such as Phoenix?

If investors in single-family real estate take a bath, and have to sell off their inventory in a hurry, how does the government bail them out in order to stop it?

Banks or homedebtors can be strung along on life support with liquidity backstops and low interest rate policies. But how do you bail out those backed by foolish private capital without getting tarred and feathered? I don't see it. Only the biggest ones can securitize their stupidity to widows and orphans, but the number of smaller pools of capital doing this must be tremendous.

The big firms have to see where this is headed - a bad place. They can turn their liabilities into debts, and make this their creditors' problem. Even if those creditors get relief from the government somehow, how can this be turned into a support for house prices?

The government may have to buy a couple million homes outright to keep the boomers above water.