Mortgage Foreclosure Scams Part 6 of 7

Here are some signs that one should proceed with caution, or even question the transaction. These can help protect consumers from fraudulent transactions, and help loan officers and mortgage professionals learn to recognize fraud, and even help to educate customers in the event that they need help in the future. Use extreme caution if you are asked by an individual or a company to do any of the following: (This advice comes from the U.S. Trustee Program of the Federal Department of Justice for homeowners facing foreclosure or having trouble paying their mortgage.)

• Calls itself a "mortgage consultant," a "foreclosure service," or anything similar.


• Contacts or advertises to people whose homes are listed for foreclosure, including anyone who sends flyers or solicits door-to-door.


• Collects a fee before providing services to you.


• Tells you to make your home mortgage payments directly to them instead of to your mortgage lender.


• Tells you to transfer your property deed or title to them.

You should always stay in touch with your mortgage company, and if necessary, contact an attorney WHEN YOU FIRST REALIZE YOU ARE IN TROUBLE. My father, who was an attorney in Los Angeles for very many years would give the same advice. (In fact, he has given me similar advice - contacting someone the moment you realize that you could POTENTIALLY be in trouble, and each time I did not follow that advice, I was in deeper trouble at the last moment than I would have been if I had just communicated any information I had known AT THE TIME I FOUND OUT. The aftermath is generally worse, too.)

So far there have proven to be two key tactics to avoiding not only foreclosure in some cases, but fraudulent transactions robbing you of your equity or your home, or both: communication and education. Sound too hard? The alternative is lose everything you have worked hard to obtain and gain over the past years.

Mortgage Foreclosure Scams Part 5 of 7

Okay, so are you ready for some real life examples? I have looked up a few (I don't personally know anyone who has been through it, or been responsible for it) and hope that they help you - or if anything, pass the word on so that we can help others avoid these financially devastating scams.

Daniel Ebihara, of Las Vegas and staff attorney for Clark County Legal Services in Nevada, recently won a trial on behalf of a young couple who fell victim to fraud. They thought that they had sold their home to avoid foreclosure. When the couple went to go buy a car, they found out that the 30-year mortgage was still theirs. The predatory lender that took advantage of the couple's financial distress, and the couple didn't even know that it had happened.

Ebihara says not only is the situation not a rare occurrence, and does not only happen at the hands of "rescuers" and predatory lenders, I am shocked to find out that it happens also with family members! The elderly are often taken advantage by their own children, who are offering to take care of them for the rest of their life if the parents put them on the mortgage. "As soon as the papers are signed, the kids are kicking their own parents out on the streets. It's horrible." I think if I had not been born and raised in Los Angeles I wouldn't believe that the human race could be so cruel, but I know it is. But there are solutions, signs to look for, and precautions you can take, and in the fraud business - a consumer who is armed with their educated mind and trained eye, is pretty much like a Kung Fu master taking on an unarmed bank robber. The key is educating, it's the best protection you can bring with you in homeownership.

Mortgage Foreclosure Scams Part 4 of 7

Another very dangerous and very concerning type of foreclosure "rescue" scams is what is referred to as the "bait and switch" scam by Steve Tripoli and Elizabeth Renuart, authors and researchers of a report by the National Consumer Law Center in 2005, (more information about the report below.) The dangers of the bait and switch are tremendous, and homeowners are often not aware their ownership may be at risk. They usually involve forgeries of deeds and documents. Many homeowners are unaware that there was any intention by the "rescuer" to purchase the home, and most often it is for pennies on the dollar, and the unwary homeowner is evicted. Many victims of this type of fraud claim that the documents the scam artists possessed were not the same documents that they signed, or worse yet - still holds the original mortgage on a home he or she no longer owns! Yes, that's right, in this scam, the victim is often left with no home, but a remaining valid mortgage contract on the original amount borrowed to purchase the home. It is popular in the areas of Colorado, Nevada, Florida, Virginia, Minnesota, Illinois, and Washing D.C., but again, it can happen anywhere or to anyone.

The report by Steve Tripoli and Elizabeth Renuart is entitled "DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-Stripping Foreclosure "Rescue" Scams". This is a very well researched report that deserves reading by every concerned consumer and honest professional in the mortgage industry. It can be downloaded in PDF form here.