The number of real estate foreclosures handled by Monroe County Sheriff's Office has risen dramatically, from 120 in 1990 to 569 in 1999. Some homeowners arrive on the road to foreclosure following the loss of a job, divorce or other personal misfortune. Buying a new home at a price far above its actual market value. More than it's worth A disturbing pattern of home sales by several local home builders and mortgage brokers using inflated appraisals was revealed in Pocono Record interviews with federal and state banking officials, law enforcement, local real estate agents, builders, appraisers and homebuyers, along with documents obtained from Monroe County Courthouse and from state officials in Harrisburg. Robinson was among those doomed from the beginning, the victim of an exploitative operation that persuades people to buy a home they can't afford at a price far above what later emerges as its real market value.
Appraisals establishing an unrealistically high value for the home are the key to the scheme.
A bank extends a mortgage loan based on a home's appraisal. If the prospective homebuyer doesn't have enough income to support the big mortgage, sometimes phantom secondary financing is set up to convince a bank that the customer can carry the load. The homeowner has no possibility of recouping his investment or paying off the mortgage in total. In many cases the only choice is to walk away, with the sheriff taking over the property, selling it at auction for whatever price someone will pay, and the creditors taking the money. But they overcharge them for the house and the land and the closing costs.