13 April 2009

Quick Picks: California Scheming.

by: Alexandra Andrews, ProPublica
April 13, 2009 1:24 pm EDT

HUD's Dollar Homes program, initiated in 1998, had a straightfoward mission: "Local governments would buy [foreclosed] homes for $1, fix them up and resell them at a discount to poor families." But in California, investors and housing contractors have been buying homes under the program and flipping them for a profit [1], reports the Los Angeles Times. "HUD officials said that because the Dollar Homes program was mandated by Congress, it does not receive the same type of attention and follow-up as programs created by HUD itself," according to the Times.

Also, an investigation by voiceofsandiego.org [2] pulls back the curtain on a "staggering real-estate swindle [3]" in California that destroyed credit scores and fueled the state's foreclosure epidemic. Jim McConville took advantage of the plummeting housing market last year to buy at least 81 homes in bulk. He then arranged multiple mortgages for "straw" buyers, who had been promised cash for the use of their identities and clean credit records. By selling the houses at inflated prices, McConville reaped $12.5 million.


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