Tuesday, April 7, 2009

Government Crackdown on Foreclosure Fraud

Foreclosure fraud is running rampant. People will do most anything to save their homes. New companies are popping up promising to work things out with lenders, making big promises all for one or more months mortgage fees. But there are free services that people can use. There numerous organizations can help, but be wary. Some warning signs are up-front fees, putting the house title in someone else's name, or discouraging the homeowner from contacting the lender. Treasury Secretary did a press conference on this yesterday, watch here -

And here is a little primer on the foreclosure scams -

Now lets take a look at an article from MSNBC titled Regulators struggle to contain foreclosure fraud -

Some 3 million households have already lost their homes to foreclosure. As of Jan. 30, 2.9 million people were 60 days or more past due on their mortgages, one out of 10 were delinquent, according to the government’s Hope Now Alliance. Another 6 million households are expected to face foreclosure in the next several years, according to private estimates.

The Federal Trade Commission has sent warning letters to 71 companies it says were running suspicious advertisements and has filed five new civil cases to halt illegal loan modification scams. Attorney General Eric Holder says the FBI is investigating about 2,100 mortgage fraud cases.


Potential victims are easily identified: various filings, including "pre-foreclosure" notices, are public records, providing all the details a would-be scammer needs to target fraud victims. Many snare victims via Web sites promising quick fixes over the phone.


The surge in foreclosure rescue fraud mirrors the ongoing rise in foreclosures, a trend that has proved stubbornly resistant to public and private efforts. Over a year ago, the Bush administration established the Hope Now Alliance to prod lenders to negotiate voluntary loan modifications with troubled homeowners. Though the group says it has helped several million homeowners work out new terms and payment plans, the results have been disappointing. In some cases, monthly payments increased under these new payment plans. In December, the Office of the Comptroller of the Currency issued a report noting that more than half of those modifications left homeowners facing foreclosure again within six months.


In most cases, prosecutors who catch foreclosures rescue scammers opt for civil actions aimed at recovering money for bilked consumers. Few cases result in criminal penalties.

The scams can compound the problems. Scammed homeowners still get foreclosed, but are also out of money or even worse like a bankruptcy filing against them. Free foreclosure seminars and services through state and federal foreclosure remediation programs can at least alleviate another source of problems.

Remember even getting legitimate foreclosure modification help does not guarantee success. Half of the mods still fail.

Plus this does not even address the emotional toll of being scammed.

1 comment:

Anonymous said...

Hello there. I am a victim of Foreclosure scam. I need help to get my home back. My home is going up for sale and I lost everything I work so hard for if anyone knows how to get help please e-mail me at madelinemartinez61@msn.com thank you. God bless you.