Friday, November 17, 2006

Let's go prey on the weak....

The current Business Week has a horrifying story
called "Habitat for Hustlers".
It tells the story of mortgage hustlers who go to Habitat House owners (who usually carry 0% mortgages) and entice them to take equity out of their home and a new variable rate mortgage. Many have been trapped, and may even lose their homes.
Ugh on the lenders.

But....wait...Double ugh on Habitat for selling off its mortgages to a wide variety of lenders with no right of first refusal. To me this again highlights the need for organizations to not just chase the money. I know that selling off mortgages lets HFH build other houses, but they need to think through using a reputable equity firm, or having some long term control over the mortgages to make sure that all the good they do is not erased in a foreclosure three years down the road.

No comments: