While looking for some blawgs to add to my RSS feed, I stumbled across this blog post from Julia Wei, a California attorney whose practice areas include real estate and lending matters. At first glance, it seems like something that should inspire a knee-jerk reaction in an attorney in my practice area. Once you really get to the meat of what she's discussing, it gets a bit interesting.
Ms. Wei is really commenting on a trend in the world of foreclosures -- firms that will tell you that you can keep your home free and clear of any debt. Given the recent ruling in New York State, where a judge awarded a couple free and clear title to their home, this outcome may seem possible. In the vast majority of cases, this remedy is extreme. It may even be that this judge is reversed on appeal.
More thoughts after the jump.
Truth be told, it is very rare that a borrower would end up keeping his or her home free and clear of all debt. The remedy is extreme, and the conduct justifying such a remedy must also be equally extreme. In addition to predatory lenders, there are predatory "credit fixers." These businesses seek out people with distressed assets and offer to help them beat the banks -- for a small down payment. As Ms. Wei notes, some of these businesses are actually scams. Two men responsible for the Dorean Group scam were sentenced to over twenty years in prison.
While not every debt relief provider is a sham, it is important to know what they will and will not do for you. If you have children, you'll likely get the following analogy: you wouldn't hire a nanny based on unsolicited mail, so why would you place your finances and home in the hands of a stranger who contacted you in the same manner? As with most situations in life, it is important to be informed and aware before making big decisions. When a promise seems too good to be true, as well as very timely, caveat debtor.
