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Representatives From the Chicagoland Non-Profit Community Attack Competition.

Representatives From the Chicagoland Non-Profit Community Attack Competition.

 

Posted: 09-26-2006

If it walks like a duck and quacks... What makes this non-profit different than any other real estate investor...null



Like many real estate investors, Neighborhood Housing Services (NHS) buys distressed properties at below market prices, rehabs them, and then re-sells them at full market prices. They work with property owners who have fallen behind on mortgage payments, and help people buy homes when they might not otherwise qualify for conventional mortgages. At a time when the State of Illinois is passing laws that attempt to restrict or make it illegal to purchase homes at a discount, Neighborhood Housing Services actually receives taxpayer dollars to subsidize these operations. Most private real estate investors, who purchase properties from homeowners in distress, perform their services free of charge to the homeowner and at no cost to taxpayers, raising questions about what NHS does with their profits and the money they receive. This continues to fuel the debate over why the State feels so compelled to restrict private real estate investment. Representatives from Neighborhood


Housing Services parroted the Illinois Attorney General's rhetoric that private real estate investors engage in fraudulent activities and are unable to help homeowners. These statements are based on 128 consumer requests for  intercession made to the Attorney General’s office, last year, when over 47,000 homes faced foreclosure. Of those complaints, the Attorney General has made public her intent to prosecute only three defendants for instances of fraud.


During a recent interview on the JT Foxx radio show, allegations made by NHS representatives Debra Moore and Michael Vanzaligen regarding investors were refuted when homeowners, previously in foreclosure, filled the phone lines to tell their success stories and share positive experiences with private investors. (One such caller claimed that after sending the Attorney General aletter describing her success story, she received a standard response acknowledging it as a complaint.)


In spite of such testimonials, NHS's Vanzeligan continued to maintain the position that private investors offered no benefit.


Illinois Senators and Representatives have publicly stated they have enacted these laws because investors “make too much money” purchasing distressed homes.


However, organizations such as NHS, who promote their non-profit status as a basis for legitimacy, appear to do nothing different than investors. The implication is that the ability to profit from the distressed property market is over exaggerated, or these nonprofits who require taxpayer subsidies to operate are simply not good at what they do (thus making the case for continued privatization).


"This is slanderous. Politicians and organizations such as NHS are just using this issue to forward their own agendas, without regard for the detrimental impact to the Chicago real estate market, Chicagoland homeowners and citizens in general," said one attendee at a recent investors' meeting. These outcries have arisen as a result of recent legislation, such as House Bill 4050 a mandatory mortgage counseling law that creates restrictive qualification guidelines for acquiring mortgages in zip codes with a high minority population, and Senate Bill 2349, The Illinois Mortgage Rescue Fraud Act, which sets price limits on the purchase & sale of distressed properties and seeks to prevent investors from helping homeowners stop Illinois foreclosures.


The real estate investment community continues to fight back, demanding that  the State eliminate fraud, not choice. Organizations such as the WCRT and Chicago Creative Investors’ Association publicly denounce the practices of charging fees in advance of services performed and make clear the expectation that sellers be informed and made fully aware of the terms of any contracts signed.



This article courtesy of Thomas Sallas of www.Meritquest.com


Also tune it to the JT Foxx Radio show Sunday 8-9am on 560 AM