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To: TheStockFairy who wrote (91314)	4/7/2001 2:12:32 AM
From: GraceZ	Read Replies (1) \| Respond to of 436258

That only works if you are the first mortgage holder. If you hold a second you are last in line and if it was a low or no down payment that goes into foreclosure you can count on the sale price just covering the first mortgage. Here in B-more they do a variation. Buy like rent! They let you buy the house with nothing more than the first months mortgage payment, they add the closing costs and fees to the mortgage and the seller holds the note. They do five year balloons. The owners almost never make it to the five years, or if they do they still can't get a conventional mortgage because they have a bad credit rating. So the real estate company gets the house back and then resells it to the next poor naive person they could find. If the buyer happens to be an intelligent idiot that actually pays the mortgage payment on time, these guys try just about everything they can to shake them out of the house. The sale price and interest rate is based on them getting the house back, not holding the note for the whole five years. The really sleazy mortgage lenders in the second and third markets go after elderly people with lots of equity and not enough income to service the above market interest rates. Some of these people don't even have a first mortgage and they are living on SS or disability. Maybe the real estate taxes go up and they can't pay them and don't realize they can contest them, so this really good deal comes in the mail, where all they have to do is call and they're sent a check....no appraisal needed, no closing costs, no income required. What they don't realize is that they just got a 15k loan at 21% interest and they signed away their house (which is paid for) as collateral.