Sunday, October 21, 2007

Cause:Effect - or, "Woe unto you, O Angel. Prepare thyself for thy Perp Walk!"

Elvis has left the building. The rats are licking up the scraps.

Kenneth R. Harney over at the Washington Post has written an interesting article about "opportunity investors", individuals who had the patience (and wisdom) to wait out the "irrational exuberance" of the recent real estate market bubble and pounce on buying opportunities. These individuals learned the lessons of the DotCom explosion which happened just seven short years ago, and waited for the builders, developers and investors to run themselves ragged with over-development, some of which had no reason being built (Miami, anyone?).

Well, like an opportunistic virus travelling along with the host, a new breed of "investor" is out there. They call themselves "Angels". These psuedo celestial beings are scoundrels, crooks, con artists and dirt bags who claim to be the Deus Ex Machina with all the bells and whistles from heaven above, but in reality, they are nothing more than robber barons who exploit people in dire financial straits and who need assistance. Instead of helping them climb out of their financial holes (some of which were self-inflicted wounds), these "angels" take advantage of the home owners' ignorance and "obtain" possession of their homes, primarily by gaining their trust with words like "we'll help you avoid foreclosure...", even though they never finish the rest of the sentence which reads "...by taking your house." It's similar to what Uncle Screwtape told his nephew Wormwood in C.S. Lewis' classic, "The Screwtape Letters": It's not what you tell them, it's what you DON'T tell them.

Some of these "angels" promise to share some of the sale proceeds with the (former) homeowner, but after closing (or before, if they have any scruples), they tell them that legally they cannot share any "monies" from the sale of the house, leaving the now "victim" homeless...and broke.

Next Week: The "Gurus"

Read Mr. Harney's full article here.