Betting against the house: Foreclosure scams

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How strange is the current economic crisis? The Wall Street Journal is offering sound advice to average Americans besieged by worries about foreclosure instead of helping banks refine their foreclosure schemes.

A big report is expected this morning from realtors about home sales, and as the AP says:

Foreclosures have swamped the market — especially in particularly distressed states like California, Florida, Nevada and Arizona. The realtors group estimates that about 45 percent of sales nationwide are foreclosures or other distressed properties.

James R. Hagerty's Saturday "Tip of the Week," "Scams Target New Local Aid," is a sort of a caveat debtor. It even argues that the federal government is the solution to people's problems. Weird for a paper that targets readers who have money, but here's an excerpt:

The Obama administration is prodding mortgage companies to reduce the monthly payments of millions of Americans at risk of foreclosure, but danger lurks for people trying to grab that lifeline.

Thousands of firms have popped up to charge fees — often more than $1,000 — to negotiate with banks for easier mortgage terms. In many cases, though, these firms take the homeowner's money but fail to deliver on that promise.

Other firms charging these fees may be legitimate, but there is an alternative: free advice from counselors certified and subsidized by Uncle Sam.

Now, the problem of another wave of urban and suburban blight from those foreclosed homes (like the one that has Florida officials flummoxed)? Let your children and grandchildren deal with that when they grow up.