Buying Bad Mortgages To Save The Market

Angel Gutierrez believes he is the answer to the current housing slump as he buys off bad mortgages. nnHe buys mortgages in bulk, often a dozen at a time, at a fraction of their value from lending institutions unable to cope with the high number of defaults which they are seeing at the moment. nnAfter buying the mortgages, Mr Gutierrez goes door to door negotiating lower repayments for homeowners. If that approach is not successful of possible, he offers to pay cash strapped homeowners to move house. nnAfter the struggling homeowners move out, Mr Gutierrez sells their house at a reasonable rate, making a profit for himself and relieving the burden on the mortgage market. nnHis approach weeds out the most unreliable borrowers from the housing market and establishes a set price for the homes. nn“You buy the mortgage for pennies on the dollar, carry the big stick, tell the homeowner how it's going to be, then double your money very easily,” Gutierrez said.nnLast month, Gutierrez visited a pleasant town where he had been informed by the mortgage servicer that there were three beautiful homes there where no mortgage payments had been made for months. nnGutierrez had gained control of the mortgages and was on his way to pay a visit to the homeowners there who were defaulting on their mortgage payments. He says that a visit from him is more welcome than a visit from a debt collector or repo man. nnOne of the houses he approached was the home of Armida and Gilberto Leos. Armida says that her husband had to come out of retirement after their mortgage repayments rose from $2,400 per month to $3,200.nnShe said “I feel really bad for my husband because he worked his heart out to get us into this house and now we're losing it.”nnThe Leos family are in severe negative equity, owing $455,000 on their mortgage despite the house recently being valued at $193,000. n