Predatory Investors - A New Danger

A recent article by Antonio Matarranz points out a new danger lurking out there for unsuspecting buyers and homeowners. It seems that predatory lending has given way to predatory investing - so beware and on the lookout for the following risky deals!

1. The Owner Financer. He purchases a distressed property that has nothing wrong with it and turns around and offers it for sale with owner financing at a high interest rate. He is not concerned about the buyers resources or credit history. After all, if the buyers can't keep up with the payments, the investor gets the property back and the cycle starts over again. This is the reincarnation of the sub-prime lender.
2. The For Sale By Owner under contract for deed. This predator who is a different version of the first example, offers a method very risky for buyers because they do have any certainty that they will be able to get clear title after making the final payment.
3. The Savior. He is the most dangerous. He "rescues" a financially distressed homeowner by taking title to the property in exchange for getting the mortgage payments current. He promises to return the title to the homeowner once he's repaid with interest. The homeowner now has the same payment but with higher debt and will eventually get evicted instead of foreclosed upon.

Remember to have someone ( your realtor, your buyers agent, your attorney ) on your side in every real estate transaction - and watch out for the unethical people looking to take advantage of those in weaker positions.