THE PERFECT SCAM: Boosting the Real Estate Market by Defrauding the Poor
THE PERFECT SCAM: Boosting the Real Estate Market by Defrauding the Poor: "Tabatha Evans didn't set out to buy a house. An unemployed single mother living on $12,000 a year in government assistance, Evans was looking to rent a place in Baltimore when she was approached by a speculator who told her she could become a homeowner for just $500 down with a loan backed by the Federal Housing Administration. After looking at a house that had been approved by the FHA, she signed some papers, secured a $78,000 government loan, and moved in with her two boys.
Evans quickly discovered that the house was worth much less than she paid for it. The investor, it turned out, had purchased the run-down house from the government only a few months earlier for $6,672. He had billed it as 'fully rehabilitated,' but the repair work consisted of a paint job and a drop ceiling to hide structural damage. The foundation was crumbling, and the house had no working furnace. The gas leaked, the kitchen cabinets fell from the wall. When it rained, water poured into the kitchen. 'That house got the duct-tape version of home improvements,' says Carl Cleary, a housing counselor in Baltimore. The cost of repairs left Evans strapped for cash. 'I could fix the house so the kids would be safe,' she explains, 'or I could pay the $500 mortgage.' While the investor walked away with a hefty profit, Evans now faces foreclosure. And should she lose her home, taxpayers will pick up the tab to pay off her defaulted loan. (Of course, the seller committed an act of fraud, but just try to find a lawyer willing to work for a woman on public assistance, simply for the interests of justice. WFI Editor) "
Evans quickly discovered that the house was worth much less than she paid for it. The investor, it turned out, had purchased the run-down house from the government only a few months earlier for $6,672. He had billed it as 'fully rehabilitated,' but the repair work consisted of a paint job and a drop ceiling to hide structural damage. The foundation was crumbling, and the house had no working furnace. The gas leaked, the kitchen cabinets fell from the wall. When it rained, water poured into the kitchen. 'That house got the duct-tape version of home improvements,' says Carl Cleary, a housing counselor in Baltimore. The cost of repairs left Evans strapped for cash. 'I could fix the house so the kids would be safe,' she explains, 'or I could pay the $500 mortgage.' While the investor walked away with a hefty profit, Evans now faces foreclosure. And should she lose her home, taxpayers will pick up the tab to pay off her defaulted loan. (Of course, the seller committed an act of fraud, but just try to find a lawyer willing to work for a woman on public assistance, simply for the interests of justice. WFI Editor) "
posted by Adrian Eyre at 2:42 PM
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