Bad times for millions of homeowners facing foreclosure is turning out to be good times for scam artists. Some homeowners become so desperate, they fail to exercise basic good judgment. And scamsters are becoming ever more sophisticated.
According to Fannie Mae, the most common "Foreclosure Rescue" scheme goes like this:
A homeowner in trouble is approached and offered a deal that will allow him to stay in his home, as a renter, in return for the deed to the property. The scam artist also usually offers a repurchase deal, so the homeowner can buy the house back when they are in better financial shape.
Once the miscreant has the deed, he sells the house, uses the proceeds to pay off the delinquent loan, pockets the equity and disappears.
Warning signs for this scam include:
- Being approached by a stranger with an unsolicited "rescue" offer.
- Receiving an unsolicited call, mail or flyer about "foreclosure rescue" or saving your home.
- Participating in a complicated deal that you don't fully understand.
- Signing documents that have blanks or false statements. Regardless of what you are told, this is never okay.
If you suspect that you have been a victim of mortgage fraud or are aware of a possible scam, you can report it by calling the Mortgage Fraud Hotline 1-800-4FRAUD8 (1-800-437-2838).
In California, you can also contact the State Attorney General's Office.
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Why should we wait until we are scammed before calling?
The problem with mortgage scam starts with banks. They are reluctant to deal with struggling homeowners. When these homeowners become desperate, they are then taken advantage of, by the same mortgage lenders that put them into the mess in the first place.
Why dont banks make good on thier promise to re-work the loans, they have on thier books?
Right now the interest rate charged by most banks on existing mortgages is over 7%, in some cases its over 9%.
Banks presenly get low interest from the fed. Their rate is 0-1%.
It strikes me as greed gone wild' there is no other explanation.
As long as banks refuse to modify loans the housing market will remain in distress, and the economy will remain in bad shape.
Its ironic, that the one industry that received the most money from the recovery (banks) continue to hold the economy hostage.
So, what can you do once you've paid up front for what now looks to be a scam? Who do you go to? How can you get your money back?
Unfortunately you're probably out of luck in terms of getting your money back right away, if at all. But what you could do is file a complaint with the CA Attorney General's office and another with the Federal Trade Commission. Then go back to the modification company, let them know what you've done, and that you plan to follow up on your complaints unless they refund your money. It might or might not work, but at least it's something. Good luck.