Unfortunately, I’ve written many posts on mortgage fraud and scams because those people who choose to defraud others is on the rise. Those who claim to be able to assist homeowners with loan modifications are finding their “niche” by cheating those in dire straights. Homeowners who need help are just wanting assistance, and those criminals are there ready for the picking. Please be careful! Click on the side bar under the category “Foreclosure, Sub-Prime, Short Sales” or here for even more posts on what to watch out for and where to go for assistance.
Scams are increasing with promises to “rescue” homeowners from foreclosure. What these scams do is take your money, ruin your credit record, and wipe out your equity. Foreclosure con artists take advantage of people behind on their mortgages and are facing foreclosure. Potential victims are easy to
find and con artists approach you in person, mail, telephone, or e-mail. They advertise their services on websites or publications. They refer to themselves with titles that sound official, such as “foreclosure consultant” or “mortgage consultant,” and market themselves as a “foreclosure service” or “foreclosure rescue agency.” If someone offers to negotiate with your lender, offers to arrange to stop or delay foreclosure for a fee, carefully check his or her credentials, reputation, and experience. To protect yourself, follow the recommendations in the Consumer Advisory alert from the Federal Reserve Bank below or consult with an attorney:
Here’s a video from Freddie Mac you can watch on YouTube about foreclosure scams……
Here’s an article from our local Sunday Oregonian on how to stay proactive when seeking a loan modification or facing foreclosure.
WATCH OUT FOR THESE FORECLOSURE RESCUE SCAMS
- Lease-Back or Repurchase Scams – Be suspicious if someone offers to pay your mortgage and rent your home back to you. This scheme often involves signing the deed to your home to the con artist. The con artist may promise to sell your home back to you, but this may be very difficult under the terms of the contract. Signing over the deed gives the con artist the power to evict you, raise your rent, sell the house, or steal your equity. You will still be responsible for your mortgage, so if the con artist stops paying your lender would have the right to foreclose on your home, and the foreclosure and any other problems would go on your credit record.
- Refinance Fraud – Look out for people posing as mortgage brokers or lenders offering to refinance your loan so you can afford the payments. Con artists may trick you into signing ownership of your home by saying that you are signing documents for a new loan. Signing over the deed to your home exposes you to the dangers described above. Even if you are a victim of fraud, you could still lose your home.
- Bankruptcy Schemes – Scams attempt to abuse the bankruptcy laws. A con artist may ask you to give a partial interest in your home to one or more persons. Each holder of a partial interest can then file bankruptcy. The bankruptcy court will issue a “stay” order each time to stop foreclosure temporarily. However, the stay does not excuse you from making payments or from repaying the full amount of your loan. In another kind of scam, a con artist may offer to obtain refinancing or negotiate a payment plan with your lender. If you make payments to the con artist, he or she may keep the money rather than pay the lender on your behalf. The con artist may file a bankruptcy case in your name, without your knowledge, as a part of the scam. Bankruptcy laws provide important protections to consumers. Scams can only temporarily delay foreclosure, and keep you from using bankruptcy laws legitimately to address your financial problems. Signing over ownership of your home, or even partial ownership, can result in serious financial harm.
HOW TO PROTECT YOURSELF FROM SCAMS
- Know what you are signing. Read and understand every document you sign. If a document is too complex, seek advice from a lawyer or an approved, trusted financial counselor. Never sign documents with blank spaces that can be filled in later. Never sign a document that contains errors or false statements, even if someone promises to correct them later.
- Get promises in writing. Oral promises and agreements relating to your home are usually not legally binding. Protect your rights with a written document or contract signed by the person making the promise. Keep copies of all contracts you sign.
- Make your mortgage payments directly to your lender or the mortgage servicer. Do not trust anyone else to make mortgage payments for you.
- Be very careful about signing over your deed. Foreclosure scams often require you to sign over ownership of your home to a con artist or another third party. Never sign over your deed without getting the advice of your own lawyer or other independent person that you know you can trust. Understand the terms. By signing over your deed, you lose your rights to your home and any equity.
- Report suspicious activity to the Federal Trade Commission and to your state and local consumer protection agencies. Reporting con artists and suspicious schemes helps prevent others from becoming victims.
If you have a complaint or question involving a national bank and cannot resolve it directly with the bank, contact the OCC’s Customer Assistance Group by calling (800) 613-6743, by e-mailing customer.assistance@occ.treas.gov, by visiting www.HelpWithMyBank.gov. Or contact Oregon’s Department of Justice’s Consumer Protection Agency at oregon.gov’s website
Source: Federal Reserve Board
© Copyright 2008-2009 Betty Jung. All Rights Reserved. Use of this article, photos and images without permission is a violation of federal copyright laws.
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