The great real estate speculator of his time was Thomas E. Davies. His speculations in Bleecker street were enormous. He made immense purchases in St. Mark's Place, and originated the phrase for fashionable residences -- "Above Bleecker." He founded the New Brighton Association, which purchased nearly the whole of Staten Island, from Quarantine round to Sailor's Snug Harbor. The Association obtained the gigantic loan from the United States Bank of $479,000 [RtO note: at a time when a night in a hotel, with meals, cost around 6 cents]. Of course the Association failed, and the property was sold in 1837 under a foreclosure.
Just to reinforce the point made yesterday ("Banker: All Your Money Are Belong to Us") that it does not require a CRA to create a real estate and banking panic; and that -- contra morons like Greenspan -- financial houses do not exercise caution or perform due diligence when lending money.
They should, but they never have. If you follow, say, Bloomberg News, you will discover that this month, American banks are busily reducing their requirements for real estate loans, because that market is heating up, and it's time to throw caution to the winds and make some fast and easy money:
Lenders are easing underwriting standards as rising home prices reduce the risk of making new loans, said Michael Fratantoni, vice president of research and economics for the the Mortgage Bankers Association.