the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Dec 7, 2009
Investors, some known on Wall Street as “vulture funds,” have found a new way to make money. Mortgage lenders arrange refinancing and then bundle thousands of mortgages together to sell to investors. Does this sound familiar? It’s what happened during the housing bubble that got the entire world into an economic mess.
But this time, government agencies like the Federal Housing Administration will guarantee the loans, thanks to the U.S. taxpayers. The government takes all the risk while the investors gain new fees and profits from the mortgage pools they invest in. And all they have to do is pretend to rewrite the mortgages of those currently losing homes. Yet who really knows whether the terms of these new mortgages will allow people to keep their homes?
As one former housing official put it, “there is something disturbing about investors that had substantial short-term profit in backing toxic loans now swooping down to make another profit on cleaning up that mess.”
For investors, it’s always a win-win situation.