If you thought mortgage-backed securities were dangerous, Blackstone financial has recently borrowed 479 million dollars to buy up foreclosed homes and package them as rent-backed securities.
“Like mortgage-backed securities, the bonds would get sold in tranches, with the senior levels getting rental revenue first, and the junior tranches taking the rest. Rating agencies like Kroll, Morningstar and Moody’s have blessed the deal, presenting the senior tranches with a triple-A rating, essentially labeling it as perfectly safe for investors.”
“This facilitates the single-family rental scheme, by giving firms a fresh source of cheap money to spend on cornering rental markets, wrestling them away from traditional mom-and-pop rental management companies.”
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