There is no shortage of companies or other investors looking to make an offer to buy a house, fast. Of course, the string attached is a discounted rate. Why would anyone want to sell a house for less than the fair market value? It turns out; there can be a great number of reasons.

As we mentioned in a different article, Tcat and his siblings simply wanted to make the house go away quickly, when their father died. This got Gudrun thinking about other situations and came up with a number of possibilities. Consider:

A foreclosure threat. It’s really a “no-brainer” for a homeowner looking at the double whammy of getting zero dollars AND having their credit rating ruined by a foreclosure. So, sure, at first glance, we buy houses, looks like a miracle. However, this has led to some unscrupulous tactics sometimes referred to as: equity stripping, predatory lending, or “foreclosure reconveyance.”check out here:sell house for cash Seattle.

This is not to say, all forms of “mortgage rescue” are bad deals or worse, illegal. Some states, for example, Minnesota and Maryland have passed laws dealing with “foreclosure reconveyance practices.” At the federal level, a 186-page document published March 24, 2006 titled Subprime Lending: An Alternative Financial Service Providers: a Literature Review, and Empirical Analysis [http://www.huduser.org/publications/hsgfin/sublending.html] was released by the US Department of Housing and Urban Development.

It is available as a 2.17 MB PDF (http://www.huduser.org/Publications/pdf/sublending.pdf) with the study broken into two parts. The former part reviews literature related to subprime lending from AFSPs (Alternative Financial Service Providers) such as check cashers, payday lenders, pawnshops, and other businesses that make short-term consumer loans.

The latter section is an empirical analysis of association of subprime lending and neighborhood characteristics including race, income, and credit risk measures.

Of course when dealing with a topic as complex as real estate, there is “no one-size-fits-all” solutions nor is there any “silver bullet” for dealing with the current mortgage meltdown in the United States. Even the solution cooked up in December 2007 has a number of limitations. For example, interest rate relief to a homeowner is not available, if they have been behind on the mortgage payments.

Gudrun and Tcat have been studying several approaches that while are admittedly creative; they represent real win/win options, avoiding the game of somebody winning at the expense of someone else losing. The “Secret Sauce” depends on the use of time and US tax code. We’ll cover this in a separate series of articles.

 

Signs – We Buy Houses Seattle

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