One of the warnings we heard early on about the real estate bubble and bust (combined with other economic trends) was that the United States risked turning into a renter nation, in which ordinary citizens own only a small fraction of the country’s real estate and other assets. That is now coming to pass, with investment funds and billionaire-investors (most of them foreign) buying up foreclosed single-family homes by the thousands to rent out to American households. The Fed is supporting this trend, as are the FDIC, Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) — but to be fair, they have few other options as they seek to unload their own foreclosed real estate holdings.
Fannie Mae is seeking a replacement for its interim CEO, who will step down shortly.
ING, having already shed its U.S. operations, is looking at further restructuring and says it will not pay a dividend until its government assistance is repaid.
Met Life is phasing out its mortgage business. It announced on Tuesday that it had stopped accepting new mortgage applications. Met Life says it will continue with its reverse mortgage business, but that is a troubled category in which no one seems to have a viable business model, so it too will surely shut down before long. Met Life had spent three months trying to find a buyer for its mortgage business. It did, at the end of last year, reach an agreement to sell off its bank. By shrinking its operations it hopes to avoid the scrutiny of the Fed and other banking regulators.
State banking regulators in New York are investigating whether banks have overcharged mortgage customers for insurance.