Sunday, November 23, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Scoping, scooping up homes from homeowners who can’t pay their mortgage

jones column sig

By
From page HSR2 | June 28, 2014 |

Q: My brother lives in Monterey and he went to a seminar on how to make money in real estate. So far, the method seems to be working for him and I wanted to see what you thought. It works like this; you go to the county recorder’s office and check to see which houses have had notices of default filed against them and are in danger of being foreclosed upon. You then investigate and get an idea of how much is owed. If the amount owed is significantly less than the market value of the property, you approach the homeowner and offer to purchase the house for the amount owed and then to allow the homeowner to live there as a tenant. This sounds like a good way to make money nowadays. Have you heard of this? Should I hire a real estate attorney to help me if I get involved?

A: Well, I’ve certainly heard of it and it appears this scheme is raising its ugly head again with the recovering real estate market. Frankly, it’s just a twist on a very old scam I’ve written about in the past.

At least before the big recession, anybody who couldn’t sleep and turned on late night television has seen people offering seminars and mail order information on how to get rich in real estate.

The speaker is always strolling out of some mansion with waterfalls and an Olympic-size swimming pool telling you how broke he was 18 months ago but now that this is all his and could be yours too if you’ll buy what he’s selling.

Your brother-in-law has just bought into the latest version of the product.

You have the program accurately described, but only halfway. The whole idea behind getting rich quick in real estate is to turn and burn the properties.

Here’s how it really works:

Like you said, you identify someone who is in financial trouble and who has a ton of equity in the house, preferably, someone who has lived in the home a long, long time.

You then offer to be their guardian angel by paying off the lender and letting the homeowner-turned-tenant rent the property for a reasonable rate on a month-to-month basis.

Overjoyed at the prospect of being able to stay in their home and getting the foreclosure notices to go away, they agree, and contracts are quickly drawn up.

At this point you, the buyer, can either pay cash or get a low-interest, short-term loan with which to acquire the property. Once the deal is done and the property is yours, you take the next step and you notify your tenant that you are tripling the rent.

The one thing you’re sure of is that the tenant can’t make the rent payments. After all, that’s why their mortgage was in default in the first place.

When the tenant doesn’t pay, you throw them out on the street and sell the property at market value. If the seller had $100,000 in equity when you purchased the property, you would realize that much profit in only four or five months.

Frankly – and from what I understand, these seminars hint at the fact but don’t come out and say it – your most likely victims are senior citizens who have owned their home for a long time, have very low mortgages, but because of health problems or the death of a spouse have fallen behind in their payments.

An added advantage is that many seniors are ignorant when it comes to real estate matters and are easily hoodwinked.

Frankly, though not always technically illegal, anyone who would choose to make a living in this fashion was morally bankrupt long before they paid their money to go to a seminar, and any attorney who would knowingly assist in this scam should have his license to practice law torn up.

The good news for seniors is that this practice may constitute felony elder abuse if practiced against senior citizens.

Anyone who suspects a senior is being preyed upon by one of these vultures should report the matter to the local Adult Protective Services.

So to answer your question, that’s what I think!

Tim Jones is a real estate attorney in Fairfield. If you have any real estate questions you would like to have answered in this column you can contact him at SolanoScene@TJones-Law.com.

LEAVE A COMMENT

Discussion | 2 comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Mr.RJune 28, 2014 - 8:22 am

    Mr Jones tells it like it is.These scum bags try to swindle seniors out of their homes. There should be information put out to seniors that give them options about their homes.This information should be mandatory for financial institution to give to seniors.After all,if you live long enough, your going to be a senior.

    Reply | Report abusive comment
  • rlw895June 28, 2014 - 10:20 pm

    Tim Jones should get a Pulitzer Prize for the public service his column provides.

    Reply | Report abusive comment
.

Solano News

Fairfield-Suisun sits between bay, valley

By Barry Eberling | From Page: A1, 11 Comments | Gallery

 
Salvation Army gets ready for Thanksgiving

By Susan Hiland | From Page: A1 | Gallery

Teens at Boys & Girls Clubs get their own place

By Amy Maginnis-Honey | From Page: C1 | Gallery

 
New mobile office adds reach to The Salvation Army

By Susan Hiland | From Page: A1

Time to start a local hall of fame

By Brad Stanhope | From Page: A2, 5 Comments

 
Conservancy plans Quail Ridge Walk in December

By Susan Hiland | From Page: A3

Film festival brings people together for good causes

By Susan Hiland | From Page: A3 | Gallery

 
Advance preparation mitigates frost damage

By Kathy Low | From Page: C4

 
Sudden Infant Death awareness and prevention

By Susan Whalen | From Page: C4

Weather for Sunday, Nov. 23, 2014

By Daily Republic staff | From Page: B6

 
 
Two injured in Fairfield shooting

By Ian Thompson | From Page: A12, 11 Comments

.

US / World

Storms raise hope in California drought

By The Associated Press | From Page: A1

 
Gambling nuke commander linked to fake poker chips

By The Associated Press | From Page: A1, 1 Comment

Winners and losers under Obama’s immigration plan

By The Associated Press | From Page: A4, 4 Comments

 
WWII mementos found in suitcase at thrift store

By The Associated Press | From Page: A5

 
Kohler introduces odor-eating toilet seat

By The Associated Press | From Page: A5, 1 Comment

Civic group: No Ferguson grand jury decision yet

By The Associated Press | From Page: A5

 
Report: Washington toddler shot playing with gun

By The Associated Press | From Page: A6

Police: Pregnant woman, 3 others fatally shot

By The Associated Press | From Page: A6

 
Hawaii airline tells pilots to return $4,000 bonus

By The Associated Press | From Page: A6, 2 Comments

Dogfighting thrives in years since Vick case

By The Associated Press | From Page: A6, 1 Comment

 
Man sets house on fire, kills responding deputy

By The Associated Press | From Page: A6

Official: SD man kills 4, including self, wounds 1

By The Associated Press | From Page: A7

 
Pope meets with autistic children

By The Associated Press | From Page: A7

Biden announces new aid for Syrian refugees

By The Associated Press | From Page: A9, 1 Comment

 
AP sources: Obama broadens mission in Afghanistan

By The Associated Press | From Page: A9

Somalia’s al-Shabab kills 28 non-Muslims in Kenya

By The Associated Press | From Page: A9, 1 Comment

 
Kerry says gaps remain in talks about Iran’s nukes

By The Associated Press | From Page: A9

Iraqi forces, Islamic State group battle in Ramadi

By The Associated Press | From Page: A10

 
Japan earthquake collapses homes, causes injuries

By The Associated Press | From Page: A10

.

Opinion

Act of kindness at Raiders game

By Letter to the Editor | From Page: A8, 6 Comments

 
 
State Capitol braces for budget battle

By Dan Walters | From Page: A8

 
Editorial Cartoon: Nov. 23, 2014

By Daily Republic Syndicated Content | From Page: A8, 2 Comments

.

Living

Today in History: Nov. 23, 2014

By The Associated Press | From Page: A2

 
Community Calendar: Nov. 23, 2014

By Susan Hiland | From Page: A2

Give the gift of gratitude this holiday season

By Dalia Adams | From Page: C3

 
Buddhist community builds shrine in Pineville yard

By The Associated Press | From Page: C3

Caught up in the spirt of the music

By The Associated Press | From Page: C3

 
Horoscopes for Nov. 23, 2014

By Holiday Mathis | From Page: C4

Hackers can get into everything, including your camera lens

By Kathy Mitchell and Marcy Sugar | From Page: C4

 
Metrosexuals be gone: Europe is agog for beards

By The Associated Press | From Page: C6

Graphic novel teaching history at Mississippi schools

By The Associated Press | From Page: C6

 
Library project puts 50 years of yearbooks online

By The Associated Press | From Page: C6, 1 Comment

.

Entertainment

PUBLISHERS WEEKLY BEST-SELLERS

By The Associated Press | From Page: C2

 
Lamott offers healing words in ‘Small Victories’

By The Associated Press | From Page: C2

Eddie Izzard has book deal

By The Associated Press | From Page: C2

 
Whoopi Goldberg writing book about marriage

By The Associated Press | From Page: C2

Bryan Cranston reads profane hit nursery rhyme

By The Associated Press | From Page: C2

 
TVGrid

By Daily Republic Syndicated Content | From Page: B11

.

Sports

49ers host Redskins looking for third straight win

By The Associated Press | From Page: B1 | Gallery

 
Cousins lifts sluggish Kings over Wolves, 113-101

By The Associated Press | From Page: B1

Stanford routs rival Cal 38-17 in 117th Big Game

By The Associated Press | From Page: B1

 
Sacramento State downs UC Davis 41-30

By The Associated Press | From Page: B1

 
Giants World Series exhibit goes on display Monday

By The Associated Press | From Page: B2

Vermette nets winner for Coyotes vs. Sharks

By The Associated Press | From Page: B2

 
Green says he’s ready to return to lineup for Broncos

By The Associated Press | From Page: B2

Bills practice in Detroit prepping for Jets game

By The Associated Press | From Page: B2

 
No. 4 Duke tops Stanford to win Coaches vs Cancer

By The Associated Press | From Page: B2

 
Vacaville Christian’s Kenyon voted Sierra Delta League MVP

By Daily Republic staff | From Page: B2

Suzy Whaley becomes 1st female officer at PGA

By The Associated Press | From Page: B2

 
Harvard beats Yale 31-24 in The Game

By The Associated Press | From Page: B3

Oklahoma’s Perine runs for record 427 yards

By The Associated Press | From Page: B3

 
Rivalry 150 goes to Lafayette, 27-7 over Lehigh

By The Associated Press | From Page: B3

 
Bowling results for Sunday, Nov. 23, 2014

By Daily Republic | From Page: B4

Bocce results for Sunday, Nov. 23, 2014

By Daily Republic | From Page: B4

 
Bicycle racing for Sunday, Nov. 23, 2014

By Daily Republic | From Page: B4

Granada clings to 1-shot lead at LPGA finale

By The Associated Press | From Page: B4

 
Swiss lead France 2-1 in Davis Cup final

By The Associated Press | From Page: B4 | Gallery

 
This date in sports history for Sunday, Nov. 23, 2014

By The Associated Press | From Page: B5

.

Business

Businesses cash in as women chase bigger butts

By The Associated Press | From Page: B7

 
Tips on getting deals during Black Friday blitz

By The Associated Press | From Page: B7

 
Most US unemployed don’t get benefits: Here’s why

By The Associated Press | From Page: B7

At a Glance: Pros, cons of mobile-payment systems

By The Associated Press | From Page: B12

 
Review: No cash, cards, just mobile pay for a week

By The Associated Press | From Page: B12

Recalls this week: strollers, candles, chargers

By The Associated Press | From Page: B12

 
.

Obituaries

Norah Dean

By Nancy Green | From Page: A4

 
Florentina R. Dulay Florendo

By Susan Hiland | From Page: A4

Albert M. Ranzani

By Susan Hiland | From Page: A4

 
.

Comics