4 ms·

In the cases mentioned specifically, the buyer has broken a law already (at least two are fraud) or the contract is invalid (lack of mental capacity). This isn

In the cases mentioned specifically, the buyer has broken a law already (at least two are fraud) or the contract is invalid (lack of mental capacity). This isn't really a story per se. People are doing illegal stuff or stuff that won't hold up in court if challenged. We have a system for it - it works ok, not fantastically. We don't need new regulation for cases like this, we just need better execution on the existing system. Better execution costs more money, and as a society we get to some balance of more taxes v more stuff slipping through.

heavyset_go 3y ago
Someone who is selling their house for pennies on the dollar most likely can't afford to police lenders and keep them honest via lawsuits, especially sellers like those in the OP who are mentally disabled.
- ianai 3y ago
  This. It seems lost just how much enforcement relies on the smallest/weakest amongst us to fight back. That’s probably priced out of those same peoples possibilities. It shouldn’t be like this. It creates a lawless atmosphere tinged with legalese as needed to coherence the victim.
stanleydrew 3y ago
This is a reasonable take, but I think it's also reasonable to suggest that if current system execution is too expensive then perhaps a new regulation could make it cheaper. Of course there are perhaps unintended side effects from new regulation, but "this is already a crime, we don't need anything new" isn't prima facie a sufficient argument. If a lot of a similar type of crime is going unpunished, there may be a reason other than "enforcement agencies are lazy", and perhaps a new law can help.
- deleted 3y ago
  [deleted]
- 55555 3y ago
  They are essentially a market maker for housing. You can sell your house to them _today_. It's necessary that they pay you substantially under market. If you want a good price, it'll take you 6 months to sell your house. You're paying a premium for immediate execution. Once you punish the fraud and crime, there's no problem left IMO. There's multiple of these companies competing and you should price shop before selling to one.
  - _benedict 3y ago
    There’s a general problem with low friction transactions being used to exploit people with diminished capacity, particularly when intermediaries are involved (another common one in UK is signing them up for multiple phone contracts) and there may be some regulatory innovation possible in this area. Punishment after the fact is not sufficient if it doesn’t adequately prevent this population being exploited.
    - deleted 3y ago
      [deleted]
    - ryandrake 3y ago
      I think the important part is that both parties go into the transaction with full information and a genuine meeting of the minds, which is obviously not the case in this market. I use eBay's "Buy It Now" functionality all the time, in preference to the "Wait 7 days and deal with snipers" auctions. I fully know that I'm trading low-price for low-friction.
      - Brian_K_White 3y ago
        That laserdisc player is only jokingly a life changing transaction. I see no reason to excuse fraud and deception, those are not convenient low friction services. I see no reason to ignore how there is supposed to be a take-backs provision which they are merely getting around, producing exactly the outcome those provisions were created to prevent.
    - lacker 3y ago
- treis 3y ago
  The real problem is that mortgages aren't as good as cash when buying a house. If someone needs to sell quick or if there are issues with the house they have to rely on these discount buyers. The protections that slow down the mortgage process have their use but it's one of those situations where the cure is worse than the disease.
jokethrowaway 3y ago
More taxes won't make judges faster or reduce bureaucracy which exist just so some government drones can sit and do bs all day. A private justice system, competition and a reputation system will help
ineptech 3y ago
I think this misses the forest for the trees; the handful of cases where they broke the law are nowhere near as deleterious as the rest where they didn't. I can't think of a better time for new regulation than a hedge fund extracting home equity from desperate people.
- concordDance 3y ago
  What legislation could you make that wouldn't be a case of the side effects being worse than the disease (bearing in mind how often we dont realize there are side effects or their severity)?
  - matthewdgreen 3y ago
    Require that cash sales be registered through a state agency that monitors sellers for patterns of fraud. Add a “cooling off period” of 7-30 days where the seller can cancel the transaction without going to court. Streamline the process by which family members can raise claims of mental incompetence. Upon a sale being registered, provide the seller with a computer-generated piece of paper containing an estimate based on recent comparable sales (with a clear warning that this number may be inaccurate) so that they are aware of how much of a discount they may be taking. None of this stuff seems terrible onerous, and better: it would significantly reduce the load on the court system.
    - danielmarkbruce 3y ago
      It's hard to then deal with the following: a) a person needs money asap, can't wait for a cooling off period. b) a person has greedy children who expect the house as inheritance, and don't like that mom/dad has decided to sell the house and spend the money cruising around the world so they decide to declare mom/dad mentally incompetent. None of these are new issues. We've arrived where we are (and that place is different in different jurisdictions) as we lurch back and forth between the least bad solutions.
  - ineptech 3y ago
    I'm not a policy analyst, but this doesn't seem very difficult. Market failures caused by information asymmetry can often be improved by mandatory disclosure of some kind. Even if you disagree, the inability of a bunch of programmers to describe an effective regulatory solution doesn't mean one doesn't exist.

heavyset_go 3y ago

Someone who is selling their house for pennies on the dollar most likely can't afford to police lenders and keep them honest via lawsuits, especially sellers like those in the OP who are mentally disabled.

ianai 3y ago
This. It seems lost just how much enforcement relies on the smallest/weakest amongst us to fight back. That’s probably priced out of those same peoples possibilities. It shouldn’t be like this. It creates a lawless atmosphere tinged with legalese as needed to coherence the victim.

stanleydrew 3y ago

This is a reasonable take, but I think it's also reasonable to suggest that if current system execution is too expensive then perhaps a new regulation could make it cheaper. Of course there are perhaps unintended side effects from new regulation, but "this is already a crime, we don't need anything new" isn't prima facie a sufficient argument. If a lot of a similar type of crime is going unpunished, there may be a reason other than "enforcement agencies are lazy", and perhaps a new law can help.

deleted 3y ago
[deleted]
55555 3y ago
They are essentially a market maker for housing. You can sell your house to them _today_. It's necessary that they pay you substantially under market. If you want a good price, it'll take you 6 months to sell your house. You're paying a premium for immediate execution. Once you punish the fraud and crime, there's no problem left IMO. There's multiple of these companies competing and you should price shop before selling to one.
- _benedict 3y ago
  There’s a general problem with low friction transactions being used to exploit people with diminished capacity, particularly when intermediaries are involved (another common one in UK is signing them up for multiple phone contracts) and there may be some regulatory innovation possible in this area. Punishment after the fact is not sufficient if it doesn’t adequately prevent this population being exploited.
  - deleted 3y ago
    [deleted]
  - ryandrake 3y ago
    I think the important part is that both parties go into the transaction with full information and a genuine meeting of the minds, which is obviously not the case in this market. I use eBay's "Buy It Now" functionality all the time, in preference to the "Wait 7 days and deal with snipers" auctions. I fully know that I'm trading low-price for low-friction.
    - Brian_K_White 3y ago
      That laserdisc player is only jokingly a life changing transaction. I see no reason to excuse fraud and deception, those are not convenient low friction services. I see no reason to ignore how there is supposed to be a take-backs provision which they are merely getting around, producing exactly the outcome those provisions were created to prevent.
  - lacker 3y ago
treis 3y ago
The real problem is that mortgages aren't as good as cash when buying a house. If someone needs to sell quick or if there are issues with the house they have to rely on these discount buyers. The protections that slow down the mortgage process have their use but it's one of those situations where the cure is worse than the disease.

jokethrowaway 3y ago

More taxes won't make judges faster or reduce bureaucracy which exist just so some government drones can sit and do bs all day. A private justice system, competition and a reputation system will help

ineptech 3y ago

I think this misses the forest for the trees; the handful of cases where they broke the law are nowhere near as deleterious as the rest where they didn't. I can't think of a better time for new regulation than a hedge fund extracting home equity from desperate people.

concordDance 3y ago
What legislation could you make that wouldn't be a case of the side effects being worse than the disease (bearing in mind how often we dont realize there are side effects or their severity)?
- matthewdgreen 3y ago
  Require that cash sales be registered through a state agency that monitors sellers for patterns of fraud. Add a “cooling off period” of 7-30 days where the seller can cancel the transaction without going to court. Streamline the process by which family members can raise claims of mental incompetence. Upon a sale being registered, provide the seller with a computer-generated piece of paper containing an estimate based on recent comparable sales (with a clear warning that this number may be inaccurate) so that they are aware of how much of a discount they may be taking. None of this stuff seems terrible onerous, and better: it would significantly reduce the load on the court system.
  - danielmarkbruce 3y ago
    It's hard to then deal with the following: a) a person needs money asap, can't wait for a cooling off period. b) a person has greedy children who expect the house as inheritance, and don't like that mom/dad has decided to sell the house and spend the money cruising around the world so they decide to declare mom/dad mentally incompetent. None of these are new issues. We've arrived where we are (and that place is different in different jurisdictions) as we lurch back and forth between the least bad solutions.
- ineptech 3y ago
  I'm not a policy analyst, but this doesn't seem very difficult. Market failures caused by information asymmetry can often be improved by mandatory disclosure of some kind. Even if you disagree, the inability of a bunch of programmers to describe an effective regulatory solution doesn't mean one doesn't exist.