Wall Street is Europe’s biggest new landlord. Consequently, it’s also viewed as one of the biggest adversaries of homeowners and renters.
American banks like Goldman Sachs have swooped into European countries during times of economic peril, buying up cheap, distressed investments and paying little to no taxes, the New York Times reported. While this tactic has helped in these countries’ recovery, some homeowners grapple with foreclosure while others struggle to keep up with rising property values.
Goldman, Cerberus Capital Management , Lone Star Funds, Blackstone Group and others have purchased nearly 80 percent of the total distressed real estate loans sold throughout Europe — so, more than $237.2 billon worth.
In Ireland and Spain, for example, Wall Street bought up mortgages on commercial and rental properties, which helped stop property values from plunging once the debt-fueled property bubbles burst. But, as the Times noted, the recovery hasn’t been an even one, leading tenants and homeowners to blame banks and firms (whether or not they are directly involved).
“It’s important to remember that these funds are not mainstream banks or charities,” David Hall, director of the Irish Mortgage Holders Organization, told the Times. “They sell to make profit and they exit.” [NYT] — Kathryn Brenzel