My Father is a great man. He once owned 23 houses in the Atlanta area at the same time. Everything was going well for him until he tried to save a woman on welfare from being put out into the street because the owner could no longer afford to pay for the house. He told the vagrant I'll buy the house so she isn't evicted (under the stipulation she moved out after one year). The year passed and the woman refused to leave. Thus began the court case which changed and caused the housing market to crash all over the country. The precedence stipulated any foreclosed home with tenants would allow the individuals to live there for one year while bank owned without paying rent before the bank could evict them.
Sounds great right? Nope. It opened the doorway to con artists which during the case my father warned the judge about while making the decision. Now individuals were able to find investors for rental houses and have them purchase the houses in cash and save the tenants home from going into foreclosure. This created two types of fraud which still appear in todays economy. One the con artist would pay only the down payment and keep the rest of the investors money. The tenants still would pay rent while their house was going into foreclosure. The "homeowner" would receive this money and believe they owned the house not knowing the house was being foreclosed on with no notice given until a year after payments to the bank stopped being received. The con artist had a whole year to run this scheme until anyone knew anything! In the end investors lost money and tenants were removed from houses assumed to be already paid for.
The second con was the homeowner knowing the investment was fraudulent after finally receiving a letter and still having the tenant pay seeing as they had lost money and were upside down on the house. Obviously the second is more forgivable under the circumstances.
I believe this is a great example of one man trying to help society in a way which can easily be abused.
Sounds great right? Nope. It opened the doorway to con artists which during the case my father warned the judge about while making the decision. Now individuals were able to find investors for rental houses and have them purchase the houses in cash and save the tenants home from going into foreclosure. This created two types of fraud which still appear in todays economy. One the con artist would pay only the down payment and keep the rest of the investors money. The tenants still would pay rent while their house was going into foreclosure. The "homeowner" would receive this money and believe they owned the house not knowing the house was being foreclosed on with no notice given until a year after payments to the bank stopped being received. The con artist had a whole year to run this scheme until anyone knew anything! In the end investors lost money and tenants were removed from houses assumed to be already paid for.
The second con was the homeowner knowing the investment was fraudulent after finally receiving a letter and still having the tenant pay seeing as they had lost money and were upside down on the house. Obviously the second is more forgivable under the circumstances.
I believe this is a great example of one man trying to help society in a way which can easily be abused.