Like vultures, the con artists and fraudsters are honing in to scavenge on the killing fields of foreclosures. They are getting caught but in most of the cases they manage to escape going to jail.

The fraudsters have named themselves loan modifications consultants or negotiators and even specialists. Some of them have the mask of legitimacy while others are straightforward con artists – out hunting for those in the desperate throes of foreclosure. They are picking the bones from the wreckage of the housing market. Business for them is not bad because in the majority of the states there is little chance that they will end up in jail. Roy Cooper the Attorney General of North Carolina said, “It’s difficult for us to get prosecutors to do the investigations on misdemeanors.”

Recently some of the states have tightened their penalties for those who have had a good hand in perpetrating the business of foreclosure scams. In other states the prosecutors are making use of fraud statues to press home criminal charges. But in most instances the prosecutors are bringing civil suits against these con artists.

The focal points of consumer protection efforts are the offices of the attorney generals. Some of these are willing and capable of bringing criminal charges and put the fraudsters into jail. It would go a long way in reducing these fraudulent practices if criminal charges were directed against them and they were put behind bars. Civil suits and penalties are too mild.

Tom Bartholomew, the President of Better Business Bureau in North Carolina said, “You’ve got to do something to get their attention. Because what’s being done — these civil actions — isn’t.”

The foreclosure fixers who operate fraudulently, target localities that have rich residents. In 2008 over 2 million homeowners faced foreclosures. This year the number is expected to increase. These people are drawn to billboards set up in localities like Las Vegas that shout about helping to save property by expert help. Radio advertisements echo similar sentiments. The stock answer encouraging the borrowers to fall into the trap is that their responses have been reviewed and they are eligible for loan modification.

Hugo Malara is one such victim. He lost his job and consequently defaulted in his mortgage payments. In desperation he contacted one Derric Robinson who claimed to be a specialist in loan modifications and advertises himself with confident phrases like “money back guarantee.” He paid a fee of $800 but since then Robinson has vanished.

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Attorney Victor Boone of Legal Aid Society, Raleigh, said that his agency couldn’t provide help to all who come seeking for it. He said, “We’re seeing more unemployment insurance appeals, foreclosures, efforts by creditors to collect.”

Lawyers have to give priority to criminal cases – in fact there is a guarantee in this regard. But it is not so with civil matters like adoptions, child custody problems, foreclosure related issues, domestic violence and discrimination at places of work.

The Legal Aid of North Carolina operates from 23 offices across the state and it has a staff numbering 250.

Because of financial constraints George Hausen, who is the Executive Director of Legal Aid, had to cut down 20 posts that were part- time. These lawyers used to screen cases over the telephone. He also had to freeze contributions to retirement measures so as to balance the year’s budget of $18 million. Despite these steps the Legal Aid agency may have to shut offices for a day or may be two each month to balance expenses.

To add to their problems the Legal Aid office at Raleigh got $29,000 less from United Way. The sum is equivalent to the salary of a paralegal.

These cuts have cut the pockets of some of their clients. One lady said her phone bill shot up while she kept on trying to connect with Legal Aid on the telephone for advice. Boone explained, “It wasn’t because nobody wanted to speak with her. She just couldn’t get through because there were so many people calling.”

Most of the funds for Legal Aid come from the federal government. Nobody knows how much they will get in the forthcoming year. They are also in the dark about how much the state will give – taking into account the massive budget cuts.

Legal Aid also gets money from the interest earned from trust accounts of lawyers. It is collected by the State Bar of North Carolina. Legal Aid got all of the $4 million from this account.

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Besides the financial debacle there are other forms of negative effects. Every 1% of foreclosure equates to 2% to 3% increase in crime – violent crime within a specified radius (0.8 miles) of that foreclosure zone. This came from the mouth of none other that the Forsyth District Attorney, Tom Keith. Keith is all for the local attorneys attending a training session being organized by Legal Aid and the Academy of Trial Lawyers. They need to updated about the sub-prime lending markets, its possible abuses and methods of negotiation when foreclosure threatens. That is the main objective – how the loans can be modified so that the people can continue to stay in the houses that are their homes. It is an undeniable fact that foreclosures are attacking all and sundry everywhere irrespective of income brackets.

A few years ago Terri Martin could not resist a chance to move into a house of one’s own. Today a granddaughter has been added to the family. But meanwhile the interest rate has gone up by 14%. As soon as she started to live in the house the mortgage kept rising. Then the original lenders sold the loan to another company. That did not stop the loan from rising. Finally when pushed to her limits she sought the help of Legal Aid and managed to modify her loan to a fixed rate mortgage. When no other help was available Legal Aid stood beside her. Attorney Celeste Harris opines that each attorney can help the foreclosure victims in a small way that will go a long way to alleviate the stress on the individual and the nation.

The foreclosure crisis is affecting all sections of the society – the borrowers, lenders as well as the community and the administration starting from the local to the federal. If the nation has to survive mere appeals to the lenders will not work miracles – what is required is strong legal action.

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The highest bidder will take over about 152 acres short of the actual clubhouse, situated on Oxford Road. The house is specifically exempted from the foreclosure notice. Apart from the sprawling golf course the property also includes a swimming enclosure, tennis courts – all amounting to a heated area of about 22,000 square feet.

The total value of the property is over $3.9 million as per records with the break up being $1.44 million being land value and $1.4 million being value of building. $1 million is calculated to be value of extra features. In 1986 it was sold for $1.75 million.
The Brook Valley Country Club with its golf course made its debut in 1966. The East Carolina Bank is handling the foreclosure. It remained non-committal and excused them by saying that they are legal hurdles about discussing without seeking the permission of their clients.

The foreclosure auction notice said that a cash deposit not more than 5% of the amount of the bid or $750, whichever is greater would be required at the time of the sale. If an upset bid is filed within 10 days then the offer will be made to one who bids the highest.

With such a giant like Brook Valley Country Club facing the anvil at an auction the question that rises to the forefront is the reason for this turmoil on the socio-economic front in general right across the country. Experts and analysts are huddling together with explanations but no magic solution has been found as yet. The prime blame is being made on the sub-prime market, which made easy money within everyone’s reach. When interests rose, so did delinquencies, foreclosures and auctions. The government is trying remedial measures. One has to wait and watch.

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In spite of being spared the destruction caused by the Civil War, Raleigh did not grow much from the original size in 1792 till streetcar lines were introduced in the 1920s, and the “Research Triangle Park” was established in the 1950s, and a freeway came up in the 1960s. IBM proved to be an influencing force in Raleigh during the 1960s, and had a great influence on the city’s growth.

Raleigh enjoys a subtropical climate with generally moderate weather during the spring, and also in the falls and winters. However, the summers are found be hot accompanied high humidity, rainiest months being July through August.

Raleigh houses and supports industries that include electrical, electronic, telecommunications equipment, clothing apparel, medical, food processing, pharmaceuticals and paper products. Raleigh is also an established center for researching as well as textiles. The city boasts to being a prominent retail-shipping hub for the eastern part of North Carolina in addition to being a wholesale distribution point for varieties of food stores.

The figures in the foreclosure listings for Raleigh are; 855 pre-foreclosures, 4 auction properties, 306 bank owned, 35 free for sale by owner, 740 resale homes and 436 new homes. There are also 2 government owned properties on the list. A very minute observation or analysis of these figures will tell you that bank owned properties form a big chunk of the foreclosure listings. Many of these properties are on the list owing to Default Notices served on the owners. Such properties are in most cases good bargains as banks do not wait very long, to look for the best buyer at the best price, and hence pitch their offers at very competitive price tags.

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The market is showing signs of self-recovery and the overall economy seems to remain untouched. At this point overreaction is uncalled for. Also encouraging are the indices showing solid consumer spending and low unemployment rates. The stocks too have hit records buoyed by corporate profits.

The Chairman of Federal Reserve opines that while on the one hand the authorities are obligated to end fraudulent lending, they have to be cautious about suppressing responsible lending

On the other hand the advocates for the affected consumers point out that this has come has a rare chance for the law to strengthen its lending rules. To substantiate their argument they point to foreclosure statistics.

The National Association of Realtors expects sales of present houses to fall by 4.6%. The home price median is anticipated to drop by 1.3%. The foreclosure rate is rising at a double rate annually all over the country.

The President of the National Community Reinvestment Coalition, John Taylor, representing the interests low-income people and minority groups, is skeptical of the outcome if the government fails to intervene.

The Mortgage Bankers Association however predicts that foreclosures among risky borrowers will amount to 0.25% of the country’s mortgages.

Democrat Senator Dodd is spearheading a movement to assist affected homeowners, with the help of big lenders – big names in the financial world like HSBC Holdings, Citigroup etc. They suggested modification of loan terms before hiking interest rates. Analyst Adeson, citing Dodd’s endeavours, warns that the housing market will suffer more if over enthusiastic banks arrange for loan workouts. He commented that lending money is not about being nice but it is all about business. He has cited the instance of Hedge Funds to prove his point.

Lawmakers are trying to work out a balancing trick between relief to borrowers and reining in of bad lending practices. Nobody wants to choke to death the sub-prime market. Senator Miller, a North Carolina Democrat has long been fighting predatory lending. He is confident of passing quickly a Bill in the House modeled after consumer protection laws in states like North Carolina and New Jersey, where reforms has not led to end of credit.

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