Short Sale, Foreclosure and Strategic Default

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Sunday, July 29, 2007

LIVING THE AMERICAN NIGHTMARE / FORECLOSURES ON THE RISE: As the housing market softens, a combination of consumer naivete and aggressive lending mean

Here is a quote from a Bay area newspaper.


LIVING THE AMERICAN NIGHTMARE / FORECLOSURES ON THE RISE: As the housing market softens, a combination of consumer naivete and aggressive lending means owners with subprime loans are increasingl: "Some observers say that many of those facing foreclosure should never have bought a house. To be sure, many consumers were seduced by the American dream of homeownership and so financially unsophisticated that they didn't apply due diligence. For Bay Area residents, more than a decade of consistently rising home prices may have led to a mob mentality of people overeager to jump into the real estate market, confident they would quickly gain equity.

On the other side of the equation, many lenders pushed the envelope. For example, Ameriquest Mortgage Co., the nation's leading subprime lender, is now paying $325 million to 725,000 borrowers nationwide for allegedly improper sales practices, including failing to adequately disclose home-loan terms and rates, refinancing borrowers into inappropriate loans, inflating home appraisals, and charging excessive fees and prepayment penalties.

Foreclosures have a much broader impact than just misfortune for the people who lose their homes. Within neighborhoods, they cause real estate prices to sink because houses on the verge of foreclosure or already foreclosed upon often are resold at lower prices. That, in turn, has a ripple effect on the"

Real Estate Blog - Mortgage Fraud + Shielding a Client--Part I

Real Estate Blog - Mortgage Fraud + Shielding a Client--Part I

I was driving around Carlsbad California today with a friend who is a Real Estate investor. When I mentioned that I saw this same no money down sign all over Encinitas and Carlsbad.

He said yes, and a few weeks ago there was a sign all over which spoke of an apprentice job where they were looking to pay the apprentice 20,000. My investor friend figured they were looking for someone with good credit to pull a fraudulent real estate deal.

The link above is an example of the type of fraud that seems prevalent in the San Diego Real Estate market, according to my investor friend. As we were driving through his neighborhood he pointed out two homes which involved homes that were marked up too high and then sold with cash back to the buyer.

Therefore, at least 2 of the 4 recent comps for a very popular neighborhood are fraudulent.

Buying a home in Carlsbad or other parts of San Diego - make sure you know what you are doing or you are working with someone who knows what they are doing.