What do you call cutting out part of the marketplace to support a special interest. If it was done in the private sector the government would be screaming cats and dogs and investigators will be running rampant.
But when the Federal Government cuts a deal to remove the private sector from the market they call it progress… You have to be kidding me!
The Obama administration said Wednesday local officials could benefit from acquiring these properties and renovating them or using the land for redevelopment projects. Congress has provided $7 billion to buy the homes, but these groups are struggling to spend the federal money because they are often outbid by speculators who are snapping up foreclosures.
“The fear is that they will purchase the property, make very minimal to no improvements on it, and either put it back on the market as a rental unit or let it sit waiting for the market to come back,” said Sarah Greenberg, senior manager for community stabilization at NeighborWorks America, a nonprofit housing group.
The administration says the largest mortgage lenders in the country, including Bank of America Corp. and Wells Fargo & Co. have agreed to let the groups purchase the properties ahead of private speculators. The neighborhood organizations will have up to 48 hours to evaluate them. via MSNBC
Essentially what we are witnessing is the collusion between government and the big banks, again. First the government takes our tax money and gives to to the banks in the form of a bailout. Then, they take more of our money and then allocates it to “special interest groups” to buy the foreclosures.
But the evil private sector is still bidding up the property values so the special interest groups are unable to buy the properties. Could it possibly be that they have value beyond what those who feel entitled to your money are willing to pay? Instead of partaking in the marketplace we have collusion happening.
So who gets screwed in the deal?
Investors – Instead of buying the properties and returning capital to all parties, they are being pushed out of the marketplace.
Contractors – They will not have the opportunity to fix up these homes. Remember Cash for Clunkers? Because of it used car prices are much higher and inventory is down. Everyone loses in both situations.
Renters – Now inventory is removed from the marketplace and either is destroyed or is under nominal government control.
Bank Stockholders – Remember them? They have take a loss on the properties intially through foreclosure and now will be forced by the government to sell the homes at a discount to those favored by the govermnet.
There is a collusion going on between Big Government, Big Labor, and Big Business folks. That is why main street and the small business community is so worried. All regulation and government intervention is aimed at helping this triumpherant at the expense of the entrerpeneur. If you want to learn more about this, read Michael Barone’s article here.
This is not good for America.