Report Links Brokers to Foreclosure Glut
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One housing expert called a group of real estate brokers "predators" and described their behavior as "unacceptable."
One housing expert called a group of real estate brokers "predators" and described their behavior as "unacceptable."
That was the reaction to the North County Times story that reported that a small group of brokers in the North County are responsible for a glut of foreclosures.
"It really raises some serious questions about their selling practices," said Zach Fox of the North County Times.
Fox looked at 973 real estate brokers and found that 21 of them had foreclosure rates between 40 and 60 percent. Typically, a broker will see 2 to 4 percent of their buyers homes go into foreclosure.
"Some of these brokers, some of these sales people, really set up first-time home buyer programs and brought in people who obviously couldn't afford them," Fox said.
He also said the brokers were Hispanics who targeted low-income Hispanics.
"They posted fliers in Section 8 housing, low-income apartment housing, really targeting people who were on the lower end and getting them into the exotic mortgages where the payments were really low at first," Fox said. "But when it reset, there was no way they cold afford the home."
Gary Acosta, who co-founded the National Association of Hispanic Real Estate Professionals, however, said there needs to be a better effort at educating potential home buyers.
"We can do a lot of things to investigate folks who are going to take advantage of certain people, but at the end of the day, we've got to invest in financial literacy, especially among multicultural communities, immigrant communities and folks who just don't have a lot of experience pursuing these sorts of thing," Acosta said.
Two of the brokers in question have been convicted of fraud, but the behavior of the other brokers may not necessarily be illegal.
