Esta en foreclosure?

Sign of the times: Westside Bubble posts on finding the 4-inch-by-6-inch card at right as a little windshield handout at a Home Depot.

We've covered this part of the story in bits and pieces, but never really in depth: A lot of the foreclosure activity in Southern California involves non-English-speaking immigrants.

The flier says in part, "I can buy your house from you today."

With prices falling throughout the region, but prices still too high to make homes attractive as rental investments, we can't imagine it's a good time to be in the business of buying foreclosed homes. So we wonder what the catch is here.

Your thoughts? Comments? E-mail story tips to lalandblog@yahoo.com.
Photo Credit: Westside Bubble

Comments

[mike]

i would try to buy it and then offer to do them a favor and rent it back to them on an over-inflated lease rate so at least they could keep their kids in the same school, stay in the same neighborhood etc. etc... i would insist on a five year lease with annual increases at more than the rate of inflation and they could even tell the neighbors that the place still belongs to them!!!!!!!!!

are'nt i a swell guy!?

[Martin]

I think the "catch" is fairly obvious. Targeting the Latin market involves a racist mentality that suggests some Latins have less business and financial sense.

These promoters are not looking for homes with a lesser value than the actual mortgage. They're looking for those properties that still have an equity position ... enough of an equity position that will offer some margin as real estate prices fall even lower.

Foreclosure proceedings do not mean some property owners do not have equity in their homes. It only means they can't afford to keep up mortgage payments. If a homeowner in foreclosure is in this position, then it makes sense that for him/her to retrieve at least some equity before foreclosure occurs. They should talk to investors who are actively looking for a "deal." It's easy for the investor to crunch the numbers and determine if puchasing this property for such-and-such a price makes sense.

Some will think this sort of investor is a vulture. To some degree, this is true. But profiting on the misfortune of others is nothing new. Hopefully, the homeowner in distress walks away with some money when the bad man knocks three times.

[MyLessThanPrimeBeef]

Mike, the counter offer just came in: Zero month security, no reference, teaser initial rent for 2 years at $200 per. to be reset in 2009, after which it adjusts every month according to Treasury's rent index.

Hopefully, the government will bail out your and others' subprime tenants if there are enough of them in trouble by then.

[investorguy]

If they can't make the payments, what makes you think they can pay the rent?

[Jason M.]

Why don't you do some investigative reporting and call 'em? A novel idea, I know...

[Bill Jones]

This is why it is a really good idea to learn the majority language wherever you live. I'll bet a lot of these Latinos are getting fleeced left and right. First they got into risky loans without knowing for sure what they were doing. Now someone will buy their house for less than it is worth and act like they are doing them a big favor.

I speak as a Gringo who has been fleeced overseas on a few occasions.

The moral: be an aware, informed consumer, wherever you are.

[joeinlosangeles]

Mike says: I think the "catch" is fairly obvious. Targeting the Latin market involves a racist mentality that suggests some Latins have less business and financial sense.

Or maybe it just means that foreclosure people realize that Hispanics make up almost 50% of the Los Angeles population, so targeting them in almost any type of business makes sense.

[Keith]

Uhh, I don't get the "racist" part. I see plenty of these ads in english going around, I'm sure they are out there in various asian languages as well. Lots of people in So Cal can't read "I will buy your home" in english. They probably signed a spanish language mortgage. What's so racist about putting it in spanish? Jeez, half the billboards from east LA to Yucaipa must be racist too.

[Another]

“I think the "catch" is fairly obvious. Targeting the Latin market involves a racist mentality that suggests some Latins have less business and financial sense. “

Hogwash! The statement above involves having a racist mind and victim mentality. For every one of these Spanish flyers, there are 50 in English. This is just communicating in a different language to a significant portion of the population.

I do not agree with, or support these “I’ll buy your house” scams. I believe the owner will get hosed royally in any dealings with this. I just take exception that this somehow targets one race and the predominately white (presumably) race is getting preferential treatment, as the statement above implies.

[waitingitout]

Martin, I wouldn't necessarily make the leap that this is the product of a racist mentailty. For one, I've certainly seen plenty of evidence (radio ads, flyers) that this kind of promotion is going on in the English-speaking community. Depending on how you look at it, it's either a way to extend the same opportunities to Spanish-only speakers (who do make up a significant number of recent homeowners) or an equal-opportunity scam.

Second, I don't think it's Latinos' lack of business or financial sense that attracts the sharks - it's desperation, which is a quality shared by everyone in this market. But let's call it what it is: if you're facing foreclosure, you're either unlucky (divorce, medical emergency, loss of job) or - hate to say it, but...- you don't have very good financial sense. Yes, Virginia, there are Latinos in this grouping, and they are no different from anyone else in that respect.

Finally, even if this is a predatory scam to take advantage of Latinos, we can't assume that it's racist. My in-laws are Korean and have been subjected to dozens of scams just in the few years I've known them - all perpetuated by other Koreans. I've learned not to draw the automatic conclusion that THE MAN is behind this kind of predation. Often it's the person you thought was your friend.

[Cal]

Off Topic:
http://online.wsj.com/article/SB119309981819267828.html?mod=loomia&loomia_si=1

I've mentioned the "declining market" flag before, most lenders dont have the main part of LA County with the declining market flag because they work on lagged data. But when the majority of the lenders (which I predict will be imminent) flip the flag it will be the final nail in the coffin. Every lender all the way down to Fannie and Freddie become even more conservative at every level of the process (cutting appraisals, stricter underwriting) when giving a loan in a declining market. This effects the few qualified buyers out there looking.

[xtine]

I'm sorry but, what racist mentality? You think they don't assume white people are stupid too? Have you seen the signs in ENGLISH all over Echo Park/Silver Lake/Los Feliz? No? Oh, I guess if we're pouncing on white people we don't worry so much right.

Do we think white people are smart enough to defend themselves? But Hispanic people need you to cry racism every time they face a challenge?

THAT'S racist.

A vulture will eat whatever meat it can find, no matter the color.

And I think your financial analysis of their motives had some truth to it. Sounds right to me (even for white homeowners).

[Aaron Kramer]

The funny thing is that when immigrants come to a country, any country they trust those who speak their language. The feel connected to them and let their guard down. One of the reasons is because of comments like Martin's "Targeting the Latin market involves a racist mentality that suggests some Latins have less business and financial sense." When people like Martin go into Latino communities and spew this cr@p immigrants, legal and illegal, believe him because he speaks their native tongue. This is a huge problem in immigrant communites when dealing with finances, schools the police and other Americans etc. etc. It not the fault of the immigrants it's Martin's fault, he stirs the pot and then blows on the fire watchingwhile it all boils over. Bill Jones is correct when he says this is why immigrants need to learn the language of the majority. If they do they ultimately protect themselves from misinformation from people like Martin and their personal opportunites will be enrished and expanded. Martin would it be racist if businesses didn't advertise to latinos? If they ignored the market completely?

[Politically incorrect]

Don't be too hard on Martin. He's originally from Berkeley, via San Francisco, but decided to come in out of the rain (after getting brain-soaked). Martin, here's a novel thought for you: Hispanics doing business with Hispanics! These "racists" speak the language of the people they're trying to fleece. Caucasian (aka white) folks who only speak English leave the Latino market to others.

Thank goodness I didn't see anyone agree with that stupid comment. It gives me hope.

[Teresa]

There's nothing racist about these kinds of flyers.

Nearly every scam targeting a specific ethnic or immigrant group is run by other members of that specific ethnic or immigrant group.

It's not limited to ethnicity, either. I recall a few weeks back, the L.A. Times ran an article about a Christian who was scammed by an "investor" who was a fellow Christian; this is how he sold himself on the victim and gained the victim's trust.

These kinds of campaigns have a universal, sinister message: "You can't trust 'outsiders,' but we are your own people and we won't screw you."

[TakeFive]

I remember some of these scams from the last downturn. They would "buy" your house for a fee to process the paperwork and have you sign over the deed. Then they would generously rent you back the house (no security deposit - no problema!) for a few months until the sheriffs showed up to evict.

Sometimes the banks took up to a year to finally get the "tennants" out, even offering cash for keys up to $1000 for the tennants to leave without an eviction. Meanwhile, scammer collected rent.

One notorious scammer was this chinese guy who always walked up to the properties so no one ever saw his car. He typically pulled this on hispanics, so I'm not sure how that affects the racism argument of a previous poster.