From the Herald News:
Rug pulled out from under them
They left her with a flier for Property Solutions of New Jersey. At the bottom, they wrote, “We can help you keep your home.”
A year later, Alford faces homelessness. She and her family will be evicted from her home of more than 38 years on Tuesday, and Property Solutions will get the property. If experience is an indicator, the company will sell the house within months and make hundreds of thousands of dollars.
“They are taking the house from out underneath me,” said Alford, 40, choking back tears.
…
But in the process, some homeowners like the Alfords lose ownership of their properties. Offering foreclosure rescue services is not illegal. But lawyers representing the thousands of homeowners who have entered the deals say some companies use fraud and deception to lure people into giving up their property.“This is a way to steal homes from people,” said Jeremiah Battle, a lawyer with Northeast New Jersey Legal Services in Jersey City. “They are set up for failure.”
…
Typically, foreclosure specialists offer to pay off an existing mortgage and sell the house back to the owner when they can afford it. The resident remains in the house and pays a monthly fee, believing that the company will help them find new financing.But the new financing rarely materializes. And only later — often when they receive an eviction notice — do residents realize that they actually signed over their home’s deed to the foreclosure specialists, as documented in cases cited by the Consumer Law Center report. The company can then flip the house for significant profit and evict the tenants.
…
What the Alfords say they didn’t realize was that on July 12, 2005, with a few pen strokes, they had lost ownership of their home.Copies of the paperwork reveal that on that day the Alfords signed over their home’s deed and title to Property Solutions in exchange for $96,000 to buy the property out of foreclosure.
…
State records show that Property Solutions has sold at least six of its properties in the state. A property on Van Dyke Avenue in Haledon was purchased in February 2006 for $302,653. It was sold just three months later for $368,000, a more than $65,000 increase. A Passaic property was sold for an $86,000 gain. A Paterson house was sold for $51,000 more than its purchase price. All had been in foreclosure and all were redeemed with money paid by Property Solutions, according to Bill Maer, spokesman for the Passaic County Sheriff’s Department, which handles foreclosure sales.
the amount of money squeezed out of the subprime market during this bubble is astounding. preying on the greed of working class people on the way up, and preying on their fear on the way down. this is far worse for our society than the tech bubble, which mainly affected the relatively affluent
Dispicable. No question these folks’ desperation was preyed upon.
skep-tic,
You are absolutely right. This upcoming bust will be much more severe than the tech bubble. Approximately 15-20% of the population owned 75% of the value of stocks, during the dot com craze. On the other hand, 70% of americans “own” their home. Remember, the brokerage houses employ margin clerks. You either have to put up more $ or blow out your position. The only margin clerk homeowners have is the foreclosure dept.. The repercussions felt from the upcoming housing bust will be of far greater consequences than the tech bubble.
BC Bob
Here’s the rub. You can say what you want about the company that did this. If they promised these people that they would be able to stay in their home, then what they did was wrong. But if I was in this company’s situation, I wouldn’t want them paying me either given their history. But what was the option for these people? To foreclose on their house or declare bankrupcy? Neither one is a good option.
The ideal situation for these peole is the give this company the house and let them pay off the mortgage. Then they walk away from the house with the company giving them $10,000. They get to start over without a bankupcy or a foreclosure to ruin their credit, and they can use that $10,000 on a new downpayment or rental property. Everybody wins.
People have been praying on the misfortune of others for centuries. That ‘s just the way it is. But there is a way to do it to make the deal good for all parties involved.
The ideal situation for these people is the give this company the house and let them pay off the mortgage.
No, the ideal situation is to realize they can not afford to stay in the house and to sell it at market price.
grim
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Off Topic…but relevent to taxes & the cost of living in NJ…
Starting N.J. Teacher Salaries Crack $50K Mark
http://tinyurl.com/z3bya
TRENTON, N.J. — Starting teacher salaries in New Jersey will crack the $50,000 mark this year, officials said.
New teachers in Westfield will be the first to earn more than $51,000.
The New Jersey Education Association set a goal of having minimum salaries of $40,000 five years ago. About 75 percent of 447 districts have reached it.
The teacher’s union has set $50,000 as its new minimum.
A spokesman for the New Jersey School Boards Association told The Press of Atlantic City raises are generally based on the cost of living plus a little more.
Whoa! I should teach in Westfield! Is that beginning teacher salary with a masters degree, I wonder?
I thought teachers were so underpaid, that is why they have such great benifits.
Could this be part of the reason we have budget problems???
well, taxes are going up yet again in NJ. Thank God I don’t own a house in NJ.
The New Jersey Education Association set a goal of having minimum salaries of $40,000 five years ago. The teacher’s union has set $50,000 as its new minimum.
Wow. A 20% jump in the “target” starting salary over 5 years. You would think they would show some restraint given the property tax crisis facing the state and the increased attention being focused on government worker salaries & benefits.
It goes to show you that the teachers (and police) unions don’t need to show tact. They call the shots in this state and they are not afraid to let you know it.
Well, my wife and I will be visiting North Carolina this weekend to scope the place out. Leaving NJ was never part of the plan, but at some point you need to say enough is enough.
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This upcoming bust will be much more severe than the tech bubble. Approximately 15-20% of the population owned 75% of the value of stocks, during the dot com craze. On the other hand, 70% of americans “own” their home.
Don’t get carried away. 35% of all homeowners have no mortgage at all. Another 50% have traditional fixed-rate mortgages.
That leaves 15% of homeowners at risk.
This two income family couldn’t afford a $700 a month mortgage with a brother and sister paying them rent. Grim is absolutely right, they should’ve woken up and smelled the coffee beans and sold the property long before all this mess.
On a more negative note, I wish I could put out mob contracts on pieces of #*(& like those two that preyed on these poor, uneducated people.