Family Services Inc., a nonprofit association based in Charleston, South Carolina, has started purchasing foreclosed residential properties, including HUD homes. The nonprofit was initially focused only in providing assistance to homeowners at risk of getting their homes foreclosed on.
According to officials from the nonprofit, Family Services is now buying Charleston SC foreclosures and other distressed residential properties in various areas of the state for the purpose of refurbishing them and selling them to homebuyers. Recently, the agency purchased a three-bedroom house for $38,500 and has put it up for sale for $115,000.
The agency has revealed that it was able to find the low priced house through Chase Home Lending. The lender reportedly agreed to give the agency a call about low priced properties in its portfolio that are not yet included in South Carolina foreclosure listings. Officials from the nonprofit stated that they are planning to build a similar relationship with other lending firms operating in the area.
Prior to venturing into purchasing foreclosed houses like HUD homes and flipping them, Family Services specializes in negotiating with lenders to lower the mortgage payments of troubled homeowners who came to them for help. According to local reports, even bank and state housing authorities have referred troubled borrowers to the nonprofit at one time or another.
Because of this, there are some who questioned the decision of the nonprofit to practice home flipping. The agency has recently been criticized for allegedly sacrificing its credibility and for entering a venture that will create conflicts of interest. Critics also asserted that flipping distressed homes and advising homebuyers on how to avoid foreclosure do not exactly go hand in hand. Part of Family Services' offerings is a course for first time homebuyers covering issues like mortgage insurance, interest rates and maintaining ownership of residential properties.
The nonprofit has responded to criticisms by stating that the association will not purchase a foreclosed home previously owned by someone who had sought help at Family Services. Officials at the nonprofit also added that they will not be forcing anyone to purchase any of the foreclosed bank or HUD homes that they rehabilitated. They added that if a buyer also happens to be someone who took their homeownership course, then it would be much better.
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