There are just no shortages of low, unprincipled dogs in the world. Crooks now have discovered a new scheme to take advantage of those in foreclosure. “Foreclosure rescue companies” are springing up everywhere there are an abundance of foreclosures and these swindlers move in on desperate people.
Today’s NYTimes exposes how ubiquitous, smarmy and sleazy these unscrupulous companies are.
Borrowers seeking loan modification are often frustrated that they cannot reach the right people at their lender or that the lender insists on a repayment plan they cannot keep, said Ira Rheingold, executive director of the National Association of Consumer Advocates.
“When you’re desperate, that’s when the crooks come out,” Mr. Rheingold said. “You’ve tried everything, and a guy calls you up on the phone or there’s an ad on TV, and you have no other options, what do you do? You go to those guys.
Illinois is one state that bans foreclosure rescue companies from taking up -front money. Currently it has filed 22 suits against companies who have violated state law. Other states do not have solid laws on the books that specifically prohibit this kind of swindle and have to approach violations from other angles.
There seems to be an endless abyss when it comes to mortgage fraud. First unqualified buyers are seduced into purchasing homes they cannot afford, based on fraudulent information. When they cannot meet the obligations of their loan, then a second set of unscrupulous vultures come along to gouge them again. It is very difficult to separate legitimate companies from those who are simply crooks.
Will any of those who set up fraudulent mortgages in the first place ever be punished? They can probably live off the fat of the land for a long time. How about this new round of scamsters? Will they be prosecuted? While much of this appears, at least on the surface, to be what has been traditionally known as white collar crime, the unscrupulous behavior in the mortgage industry and its recovery has set off a recession in this country. This greedy, criminal behavior has devalued our homes and thrown markets into tailspins, dried up our savings, and deflated our retirement accounts. These mortgage bastards have robbed the American people no less than if they had put a gun to our heads and told us to give them all our money.
My Aunt bought a house she could not afford and then she had to foreclose. She wasn’t seduced. She was stupid.
It never would have been possible without the interference of big government into the free market.
Now with Obama, the problem will skyrocket, the dollar will collapse under the strain, and anyone who hasn’t divested from the american economy (about 99% of the people) will be left with nothing but a lot of american dollars that cannot purchase a tenth of what they used to.
Regardless of who is smart, who is stupid, who is honest, who is dishonest, we all end up bearing the cost of this fraudelent behavior.
Truth be told a lot of behavior is completely legal. I know that some, perhaps many, have stepped over the line, but giving a mortgage to someone you know won’t be able to pay, pocketing the commission and passing the loan to unsuspecting investors is legal if the right CYA’s are taken.
I know more than a few families who have lost their homes. The house next door was bought by a Mexican family. They put $60k down. After a year their mortgage payment increased to an amount they had no hope of paying. Meanwhile the guy’s kitchen/bath remodelling business was tanking. The bank foreclosed. He’s lucky to be working at Costco now.
It’s so easy for some to smugly say that he’s stupid, and they may be right. And it was completely legal for the mortgage broker to not tell him that the payment would increase. After all, it’s in the documents he signed. But the guy got screwed. That’s it. Someone took advantage of his naivete. Was it legal? Probably. They were really happy living there.
It may be legal but that doesn’t make it morally justifiable. And being stupid isn’t a crime nor is it immoral, but it does make life very difficult. There’s all kinds of scams out there, and no amount of regulation is going to make them go away. In fact, regulation oftentimes only creates the illusion of legitimacy that suckers a lot of people in. Witness Enron. Witness Bernie Madoff’s clients. Witness all the people who think Obama will pull down the heavens to save us from economic ruin.
Fraudulent practices should definitely be punished severely. But if all the information is included in the contract, and you sign it, there’s little more one can ask for.
My Aunt was warned over and over again by her relatives not to buy the house that she eventually foreclosed on. She chose not to listen. She saw what she wanted to see.
In the same vein, most of the country looks at Obama and they see what they want to see. His economic policies will destroy the value of the dollar, and leave us all in poverty, but desperate people need to believe in miracles.
Guapo, thanks for your insight here. There seems to be a fine line between fruadulent and not fraudulent. I feel badly for anyone who has lost that much money. Those who put down little or nothing, not so sorry.
Mackie, some people just have to learn for themselves I guess. Maybe they like getting kicked in the head.
Maybe we all do.
Considering the weak state of the economy, why is Obama going to spend so many precious tax dollars on the inauguration? Millions and millions is being needlessly spent on security alone. For what?
I thought he promised change?
Wouldn’t a real change be to cancel all the inaugural events that us taxpayers have to foot the bill for? And we’re not even invited. Who is invited? American royalty.
El Guapo,
Nice post.
Many folks that may not have been familiar with everything they were signing, and did have people advising them or translating. The “rules of the arm game” were NOT full explained and/or understood. Unfortunately, they will suffer the losses.
It’s also important for people to remember NOT every foreclosure is due to an ARM. People’s circumstances are always changing. There are some that have/will lose their house in foreclosure due to loss of job, loss of spouse/mate, health issues, divorce, custody, relocat etc. This is forgotten. W
The American people do not foot the bill for the Inauguration. Each inauguration is paid for with private donations. I am not sure about who pays for security, if that is the govt or private donations.
And I agree, it does seem excessive in these times of economic uncertainty. Several people have suggested we need to party. Not sure I agree.
Not to get this too far off-topic, but on the subject of who pays for the innauguration and who pays for the security:
Back in 2005:
The Presidential Inaugural Committee has said putting on the inaugural events will cost about $40 million, which is being raised from private donors — more than half of them corporations that gave as much as $250,000 each — as well as sales of tickets and merchandise.
In addition, the federal government and District of Columbia will bear the costs of providing security, expected to be around $20 million.
The above two paragraphs are from a longer article about the Innauguration at http://www.cnn.com/2005/ALLPOLITICS/01/19/bush.inauguration/
I can’t find similar figures for 2009, but I’m sure the numbers are higher, however who pays for the different things would be the same. I guess it would be interesting (to me at least) to see how the 2009 numbers stack up to the 2005 numbers – if they have kept up with inflation or whatever.
I read where Obama’s is going to cost $150 million. I do not know how accurate that figure is and I cannot source it. I just r3ecall reading it. Also, I read that Obama refused to take donations from lobbyists.
The amounts seem excessive, especially on top of a campaign that costs God knows how much. On the other hand, the pagentry of the Inauguration is a time-honored American tradition. No one wants to come to town and be the poor boy I guess.
If Obama’s Innauguration is going to cost $150 million, when the last one was $60 million for both the Innauguration and security, that defnitely is way excessive. Even in good times a 2.5x multiple over the previous one would be unacceptable, but especially in these times! That’s crazy if it is true. I’m sure somewhere in the days to come we’ll find out the true figure, but if it is even half of that it is still way too much!
I suppose the Innauguration itself since it is corporate donations is one thing, although then again one can argue that almost all corporations are feeling hard times these days. The security is another thing, which is paid for by both the US and DC taxpayers. I’m glad I don’t live in DC as I would feel like I’m being double taxed for this. Then again, for many other reasons I’m glad I don’t live in DC, but that’s besides the point.
MH – it appears you read correctly – an article at http://www.msnbc.msn.com/id/28707475/ . It also mentions 4 years ago Democrats complained about the cost of Bush’s Innauguration! That’s funny. I’m sure though every innauguration the other party has complained about the cost.
A funny item in the article mentions as far as being frugal for Innaugurations – back in 1945 FDR had his Innauguration at the White House and made a short speech and served his guests cold chicken salad and plain pound cake! Now that was a cheap innauguration!
I guess some businesses are benfiting from the money spent so I suppose that’s a good thing – a temporary boost to the local economy.
I am howling over your FDR story. I guess it was his 4th Inauguration also. Maybe he had put on the dog enough. But cold chicken salad and pound cake. ho ho ho.
I think all the hoopla is ridiculous on many fronts so I grouse and grumble regardless of who it is–but only a little. Perhaps event planning and doubled in cost in 4 years? Perhaps Bush saved some of the first Inauguration stuff. Who knows.
We are sending 100 police officers to the Inauguration on Tuesday. I hope we get reimbursed for their costs.
I knew we were sending some police officers but I didn’t know how many. One wonders what effect that has on law enforcement in PWC on Innauguration Day.
I thought the story about FDR was pretty funny too. I guess by the 4th time the Innauguration festivities may have gotten a bit old. Maybe he decided to give the White House chef the day off, too.
I hope we are getting reimbursed for the cost of sending the 100 police officers to the Innaguration. I guess our federal taxes are paying for it, or at least I hope so rather than the county having to pay for it. 100 police officers at 8 hours is a pretty good size chunk of change.
Gainesville,
I hope we get reimbursed too. I believe our officers will be on duty more than 8 hours.
Does anyone know is it just an 8hour shift?
Chris – I think you are right – I was just tossing out 8 hours figuring it was at least that, but it is probably more. I would be interested in what the total bill is for the 100 officers, and who is paying for it (that is, is the county get reimbursed).
All of the officers from all local jurisdictions (Arlington, Alex, Fairfax and Prince William as well as State) have been told to prepare for 15-18 hour minimum day up to a potential 24 hour shift. All the agencies will be reimbursed for the expense of sending employees into DC, however, any local expenses incurred because of Tuesday’s event (such as local traffic, parties etc.) will not be reimbursed.
PS, the reimbursement is from the Federal Government and some also because its been declared an “emergency” by President Bush. Usually when a local government requests aid for fire, ambulance or police service, it is conducted under COG’s “Mutual Aid” pact where the services are not reimbursed.
Thanks for the info Lucky Duck. That answers the question of how it is being reimbursed. That’s a lot of hours but at least the time in DC is being reimbursed. Otherwise for 100 officers that would be a minimum of 1500 hours and a max of 2400 hours. I’m guessing the total is going to be somewhere in between, but that’s still a fairly sizeable amount of money.
Lucky Duck,
Thank you very much. I knew there’d be an “emergency” declared. I was not aware that we here in PWC would benefit from that. I’m very pleased to hear this.