The largest transfer of wealth from the public to private sector is about to begin. The federal government will be bulk-selling the massive portfolio of foreclosed homes now owned by HUD, Fannie Mae and Freddie Mac to private investors — vulture funds. These homes, which are now the property of the U.S. government, the U.S. taxpayer, U.S. citizens collectively, are going to be sold to private investor conglomerates at extraordinarily large discounts to real value. You and I will not be allowed to participate.
The reason “you and I will not be allowed to participate” is that these properties will only be sold to those that can bring “a billion dollars or more to each transaction” – entities like hedge funds, foreign sovereign wealth funds, or companies like Goldman Sachs.
Even if you’d like to buy just one home at public auction, prepare to show up with serious cash. Traditional foreclosure auctions where individual properties are sold at the largest discount typically require cash within 24 to 48 hours. See our story How to Buy a Foreclosure.