Tempting Eye catching Foreclosure Help Signs

March 19th, 2008 | Tags: Real Estate

Looking at signs splashed everywhere offering help for foreclosure blues in the form of buying houses, cash or refinancing one may tend to think that this is nothing but good old American entrepreneurship in full force. These companies seem to the god-sends in troubled times. In reality these companies are nine times out of ten sleazy predators says Harvard Law professor, Elizabeth Warren. Once you cross their thresholds these artists will acquire the foreclosed house at a fraction of the market price. They might go a step ahead and manage to transfer title to a trust than will empower them to rent or resell the unit to straw buyers, while the borrowers remains committed and legally bound to clear the mortgage as before.

Today’s foreclosure situation is a repeat of what happened in the late 1920’s when one borrowed money to buy stocks and then used these stocks to buy even more stocks. At a point the stock market got over-inflated and burst. Today the same thing is happening with house equity instead of stocks.

Foreclosure scam artists can smell money. Lately Americans have been pouring in their money into houses – especially so after the collapse of stocks. Property seemed to be the best bet. Not for nothing has houses been called real estate – something real and tangible. Overnight real estate became the choice of investors for stock-weary people. The financial bodies were not far behind to take advantage of the change and loosened their purse strings. A house or even two houses may be bought but the question is – can one afford it? Anticipating this question to enable the borrower to continue with his or her life style the lenders offered innumerable ways to strip the equity through credit lines and further loans. The federal government supported the move by keeping interest rates at historic low levels. Suddenly the houses began to look like stocks. Piece meal the house gets sold – the guest room and then the backyard. Elizabeth Warren calls it the ‘the middle-class squeeze’. With rising medical bills, housing, higher education teaming up with job losses, volatility of income and divorces the American piggy banks – the houses are at a risk as never before. The present foreclosure crisis shows up as never before that investors and speculators are going to be badly mauled together with the hapless house owner who built their homes within the walls of bricks and mortar.