THE FORECLOSURE MESS

04.03.08

This problem is one that fortunately has not hit this area in any big way, however it has spawned a new business that seems to make money out of other peoples' woes. A story on this was in Sunday's New York Times.

Once again, companies that were making money giving easy mortgages, are doing the same under a new business model. Default-servicing companies, in concert with (some) law firms that "assist" these companies in foreclosure actions, are making lots of money by charging fees associated with the foreclosure process. It is best read in the "SUNDAY BUSINESS" section of the New York Times. In it are details of how the two groups work and charge, during the process of forcing people in default on their loans, out of their homes. The New York Times article was not flattering, to say the least, but it made for good reading. Some of the example-stories were "chilling" to this writer.

One company, Countrywide Financial, seems to be in the middle of this "business" - foreclosure - again, as well as offering terrific "new" easy money mortgage programs through their Countrywide Home Loans division! I got such a "new" program offer on my computer on Tuesday. I am not sure whether their various divisions work for or against each other!

But, back to the beginning of this column. One bonus of this area has been the relative solvency of borrowers along with relative "value stability". Interest is returning and business is showing signs of increased activity. I now have a much more optimistic feeling for our area, although, as I said, there may still be a couple of quarters of slow business ahead.

©2008, R. Leech features.