Easy Credit Creates Mini Ghost Town In One Section Of NYC & Foreclosure Rescue Scams Throughout City

The New York Times reports:

• Along the streets of Far Rockaway, many recently built two- and three-family town houses sit waiting for even one family to move in. Some have boarded-up windows, while others have clumps of garbage in driveways that have never seen a car. Desperate developers hoping to cover their bets — and stem their losses — tape up both For Rent and For Sale signs inside windows that face nearly deserted streets. The same blocks were once home to sprawling single-family houses with wraparound porches. But during the superheated real estate market of just a few years ago, longtime residents sold out to developers who rapidly demolished the old to build rows of plain vanilla town houses sold, it seemed, to anyone who could sign a mortgage application. But as the market cooled and credit got tighter, many of the new homes sat empty. On a few blocks, developers have built nothing but plywood walls to hide the weed-choked lots after the old houses were torn down.

In addition, The Times article had this excerpt on the plight of homeowners facing foreclosure who have fallen victim to foreclosure rescue scams:

• The people who can legitimately help them are already overwhelmed and not looking for new clients. The people who are not legit are looking for them and they treat them nice. That is why people end up signing papers now not even thinking about it.

In the case of one married couple, a friend of the husband’s "offered to help them save the house. Instead, ..., they wound up signing over the deed to him and had the house sold out from under them."

For more, see Risky Loans Help Build Ghost Town of New Homes (if link expired, try here).