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How Housing’s New Players Spiraled into Banks’ Old Mistakes
Article

How Housing’s New Players Spiraled into Banks’ Old Mistakes

Matthew Goldstein, Rachel Abrams and Ben Protess
The New York Times, 2016
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8

Recommendation

Private equity firms’ entrance into the housing market in the wake of the 2008 housing crisis helped restabilize America’s economy, but have they done a better job than banks at keeping struggling homeowners from foreclosure? Investigative journalists Matthew Goldstein, Rachel Abrams and Ben Protess examine private equity firms’ effect on homeowners and renters. In the process, the authors reveal the ways the firms have, in many ways, “repeated the mistakes” of the banks they supplanted. getAbstract recommends this article to policy makers, homeowners and economists.

Summary

In the wake of the 2008 recession, the US government welcomed private equity firms’ investment in the struggling housing market. The hope was that these firms would help stabilize housing prices and decrease foreclosure rates. Federal housing officials believed private equity firms could generate profit for investors – including teachers’ and police officers’ pension plans – by purchasing foreclosed homes and “troubled mortgages” at low prices and by offering homeowners more options to avoid foreclosure.

Ultimately...

About the Authors

Matthew Goldstein is assistant business editor for the Dealbook financial news service at The New York Times, where Rachel Abrams and Ben Protess are investigative reporters.

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