Words of Warning from Lew Ranieri, the Father of Securitization

“If we go from 1.2 to 2.5 million foreclosures, the system will come apart at the seams. Putting that many people out of their houses, causing that kind of destruction…because remember, we have hundreds of thousands of vacant houses…a vacant house is a virus in the neighborhood, the house degenerates, it’s not like office buildings.......

If you look at some of the latest deals, so much of it is hospitality, which is one of the most volatile property types, and one of the most dangerous. And when you look at the ratings coming out of the rating services given the nature of the property types and then look at the pricing, at a risk adjusted basis its sort of like exactly back to where we were.”

~ Lew Ranieri