Jafer Hasnain: Solving the Foreclosure Crisis

Foreclosure is mutually destructive for all parties and something should be done about it.  That’s the opinion of Jafer Hasnain, Managing Principal of Lifeline Assets, the first large-scale institutional investment fund targeted toward acquiring single-family homes that are in financial distress.  The firm’s business model aligns the interests of distressed homeowners, banks, investors and American taxpayers.  Lifeline Assets is a socially responsible fund that plans to invest more than $1 billion in distressed homes through short sales.

In a recent interview for the Alter NOW Podcasts, Hasnain said that the real problem shaking the economy is on the residential side.  At present, the $15 trillion American mortgage market is seeing 1.4 percent of loans in foreclosure, with another nine percent past due.  Hasnain, who had a front-row seat when the Resolution Trust Corporation spent $125 billion to relieve financial institutions of their distressed real estate in the 1990s, is providing a private sector solution to the housing crisis that relieves the taxpayers of that burden.

Hasnain has built one of the first institutional-scale single-family residential investment funds in the United States and created a price discovery mechanism that is an objective and sensible way to learn how much to pay for a house whose mortgage is in distress.  This way, a family in a home that has gone in default agrees to stay in the house, pay rent and maintain the property until they have the financial ability to re-purchase their home.  Lifeline Assets’ offer to purchase each house is contingent on the resident’s willingness to continue living there.