How Wall Street Turned These Houses Into 'Hell'

Companies snapped up 200K homes nationwide after the financial crisis
By Neal Colgrass,  Newser Staff
Posted Mar 8, 2020 12:28 PM CDT
How Wall Street Grabbed $60B—and Your House
Stock image.   (Getty Images)

Chad Ellingwood's life is pretty much hell, and Wall Street is stoking the flames. That's according to a New York Times Magazine article chronicling his fall from happy homeowner in LA County's San Fernando Valley to miserable, embattled tenant in the same property, now owned by a company that raises the rent, slaps him with fees, and tries to evict him whenever he falls behind. Granted, Ellingwood opened the door by beginning a bankruptcy filing in 2012. But even though he never finished it, a lien was placed on the property, allowing a company called Strategic Acquisitions to buy his home. Turns out there are dozens of similar companies that bought foreclosed properties around America after the 2007 housing crisis, turning them into profit-makers now worth $60 billion.

In fact, Wall Street investors bought 95% of Fannie Mae and Freddie Mac's distressed properties without any real conditions, creating a single-family rental market that they funded with new kinds of bonds and shares—which the companies can only afford to reimburse by charging tenants stiff fees and higher rents. A top company says it fixes up homes and has a 96% occupancy rate, but there's a Facebook group of irate tenants struggling to fight back. Meanwhile the Wall Street Journal reported last year that Blackstone, a major firm that invested in all this, walked away with $7 billion. Which leaves Ellingwood where? "I'm living on the razor's edge," he says. Click for the full article. (Or see which Democratic presidential candidate Wall Street liked best.)

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