The Mortgage Bankers Association reports that a growing number of homeowners are having a tough time making their mortgage payments, and rising interest rates are making refinances and quick sales difficult. Investors who specialize in foreclosures thrive in this climate, posting ads in poor neighborhoods with promises of speedy cash sales or weeding through court filings to locate distressed homeowners. While some investors offer enough money for homeowners to pay off the mortgage and pocket the difference, others persuade cash-strapped homeowners to sign over the title, remain in the home as a tenant, and possibly repurchase the property at a later date. However, some experts urge homeowners to obtain advice from a financial counselor or seek help from their lender instead, as some of these transactions result in the homeowner being evicted after signing the property over to the investor. Legislation has either been passed or is under consideration in several states--including Illinois--that would force foreclosure rescue companies to clearly disclose the terms of the deal and give homeowners a certain number of days to back out.
Source: Wall Street Journal
