Behind on the Mortgage - Expect a Call From a Shark

As the ARMs get broken and the interest only mortgages  turn venomous, a person who is facing bad times and owns a house can be in big trouble. There are a group that prey on homeowners who are facing foreclosure. They will search foreclosure reports and look for those that need to sell or lose whatever equity they have in the home.

And although I refer to these bottom feeders in not the most glowing terms, they do have a purpose. If the choice was to turn my home over to the bank or sell out to a shark, odds are the shark would win. Homeowners in the Northeast and West Coast who have appreciation in their homes but can not  pay their mortgage will be prime targets of these land sharks.

The slowdown in housing sales, after five years of frantic buying, has ended the party for many real-estate investors. But the cooler market is welcome news for a subset of investors — those who target homeowners facing foreclosure.

Most foreclosure investors run small, local operations, buying and reselling a handful of properties a year. Some are self-taught; others take courses touted on Web sites or in late-night TV ads. Invariably, they draw criticism from advocates for the poor, who accuse them of preying on the vulnerable.

“Our time has finally come!” proclaims a recent email advertisement from ForeclosureS.com, a Fair Oaks, Calif.-based company that markets training materials for would-be investors. A 90-minute telephone program promises to teach foreclosure specialists how to be a “white knight” and not “feel like a shark.”

More people are falling behind on their mortgages, according to the Mortgage Bankers Association. The percentage of loans on which payments are at least 30 days overdue rose to 4.7% in the fourth quarter of 2005 from 4.4% a year earlier. With interest rates rising, it’s harder for homeowners to refinance or sell quickly. via  the WSJ.com