Rep. Mark Takano Hosts Briefing on Rental-Backed Securities

Press Release

Earlier today, Rep. Mark Takano hosted a briefing for Congressional staff on the issue of rental-backed securities, institutional investors in the home buying market and the potential consequences.

Sarah Edelman, Policy Analyst for Housing and Finance for the Center for American Progress, Ben Hellweg, Head of Acquisitions for Hyperion Homes, and Sam Khater, Deputy Chief Economist for CoreLogic joined Representative Takano and participated in a panel discussion.

During the event, Takano said, "It's important for Congress to take its responsibility [seriously], in terms of oversight, and begin to understand these financial instruments and the phenomenon of investor owned properties that are growing across the country."

Sam Khater from CoreLogic commented on the size of the market and its impact saying, "Several of the questions we get all the time is, "How big is this market? Do they have an impact?' From a national perspective, the impact is small, but from a local perspective, the impact is fairly large. And from a price perspective, there is definitely an impact, especially in some of the markets where they [investors] are particularly active."

Sarah Edelman from the Center for American Progress discussed potential consequences of the rental-backed securities saying, "If bond holders stopped receiving their payments, they have a few tools. They can foreclose on the homes, because they do have mortgages on them or they can foreclose on what's called the "equity pledge,' which basically allows them to take over operations of the borrower. They take over the [operations of the] borrower, they can decide either to continue to rent out the properties or sell them or do some combination of both of those things."

Source