Saturday, June 03, 2006

Threat of foreclosure real estate niche

There was a front page piece in the May 30, 2006 Wall Street Journal (sorry I can't link to it...WSJ is paid site) regarding the cottage industry of real estate investors purchasing homes from people close to being foreclosed and the related scrutiny this type of alleged predatory investing has been recieving from regulators and legistors.

The other interesting aspect of the piece is the huge number of training businesses that exist that instruct persons how to purchase foreclosure properties. It discusses Foreclosures.com and HomeVestors in the piece.

And for those of you in IL, here's the press release from the Governor's office regarding Illinois' new law regarding foreclosure investing.

Here's a short blurb from the press release so who knows how biased the language is:

The legislation:

· Limits the amount a mortgage rescuer can make if the homeowner is successful in buying back the home to 125% of the total debt on the home paid by the rescuer.

· Requires that all mortgage rescue companies provide disclosures and give homeowners the right to cancel contracts, and increases penalties for violations.

· Requires that the mortgage rescuer provide the homeowner with at least 82% of the value of their home if the homeowner is eventually unable to buy back the home from the mortgage rescuer.

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