Owning land (acreage), real estate equity, has always been considered a reliable indicator of a certain amount of wealth; that the land owner was relatively well-to-do. In fact, the desire to own land was such a top-tier priority in olden times that Barons (noblemen), during the middle ages traded their loyalty to kings in return for land and, as a consequence, earned the alternate title of Land Barons.
One hardly needs to go as far back as the middle ages however, because we have our own modern-day brand of land barons right here in the United States of America with Ted Turner of cable television fame topping the list per the following quote:
“Turner tops the list of the nation’s largest private landowners, compiled by Forbes with the help of The Land Report, a publication that tracks large landowners and land sales”. The prolific and wealthy gathering of landowners referred to have seen recent sales of their property reduced by fifty percent (50%) and, in some cases, even more.
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The msn website’s real estate section elaborated further:
Sales are still occurring, but at prices down 50% or more from what owners thought they’d get at the peak of the bubble. The 3,151-acre Boot Jack Ranch in Colorado sold in April for a reported $47 million, down 47% from its initial asking price, but still a hefty $15,000 an acre. The ranch is near the Wolf Creek Ski area and has coveted water rights of 100,000 cubic feet per second.”
It is reasonable to assume thereore, that without the “…coveted water rights…” and close proximity to “the Wolf Creek Ski area…”, that reduction of the equity in these properties might have been closer to 67% or more. Real estate properties have lost a lot of equity over the last three years, but here is what separates Mr. Turner and his fellow top-ten list landowners and the average property owner in this country: Those land barons were able to withstand the loss of equity and still receive a “hefty” sum for the sale of their properties.
A similar difference exists between the nation’s homeowners and companies like A.I.G. (of too big to fail/government bailout notoriety), Pimco, Metropolitan Life, BlackRock and other members of the “…group of more than 20 investors…” who purchased mortgage securities that soured when the housing bubble burst. Mortgage-backed securities that were purchased from lenders like countrywide (now owned by Bank of America).
A difference highlighted by the ability of these investors to take action (bring lawsuits) against lenders they believed to have done them wrong or defrauded them by misrepresenting the quality of mortgages the investors bought from those lenders; and the inability of the average homeowner to do the same when states attorneys general (defenders of the average homeowner), upon whom they rely to bring the same lenders to justice for actions deemed inappropriate, if not illegal, that were perpetrated against said homeowners.
Paul Krugman, well-known American economist, professor of Economics and New York Times op-ed columnist wrote in his July 17, 2011 issue Letting Bankers Walk that:
“Ever since the current economic crisis began, it has seemed that five words sum up the central principle of United States financial policy: go easy on the bankers.”
Last fall, we learned that many mortgage lenders were engaging in illegal foreclosures. Most conspicuously, “robo-signers” were attesting that banks had the required documentation to seize homes without checking to see whether they actually had the right to do so — and in many cases they didn’t.
“How widespread and serious were the abuses? The answer is that we don’t know. Nine months have passed since the robo-signing scandal broke, yet there still hasn’t been a serious investigation of its reach. That’s because states, suffering from severe budget troubles, lack the resources for a full investigation — and federal officials, who do have the resources, have chosen not to use them.”
If we are to believe therefore that “federal officials” will remain steadfast in their choice of refusal to initiate a full investigation into “illegal foreclosures” against all the average homeowners throughout this nation, then not only will there be no justice for these homeowners, but the loss of equity they sustained as a result of a crises brought about by the greed and financial shenanigans by some of these same lenders is equity they will never regain.