The foreclosure crisis is galloping ahead with no signs of slowing down. Defying all palliative measures the situation is going from bad to worse. The apprehension is that before the year draws to an end the foreclosure numbers will further increase. Despite modest increases in house sales the flooding of the market with new foreclosure listings is negating all gains.

Close on the heels of foreclosure comes the scammers. Trying to anticipate their move and to help the foreclosure victims the attorney general of the state of Washington are mailing about 14,174 letters in the current week giving prior warning of their activities. Under the garb of help these foreclosure rescue teams rip off whatever is left of the foreclosure victims.

The scammers sniff around looking for foreclosure victims. They locate them by prying through public listings that are freely available on many commercial websites. Then they come forward with offering a shoulder to lean on and cry. They make big promises about help. They strike at the psychological moment when the foreclosure victims are traumatized.

Rob McKenna and his staff are using these same foreclosure listings to warn the foreclosure victims. In no uncertain terms they are told that these promises are totally false and cover up well-calculated moves to dupe the vulnerable borrowers. If they play along with these fraudsters then they will in all likelihood lose all their equity and perhaps even their properties.

The attorney general citied many examples of how many unwary house owners had handed over ownership of their houses to so-called ‘investors’ paid generous amounts to go-between messengers who basically did nothing. When the borrowers come to learn the naked truth it has invariably turned out to be too late. Meanwhile the house and whatever funds they had have slipped out of their fingers.

Foreclosures across the state have risen to unprecedented numbers. People are struggling to continue with higher mortgage payments as the interest rates continue to climb. Lenders send out default notices when the borrower falls behind repeatedly in making monthly payments.

In King County 220 foreclosures have listed relating to tax defaults. If funds permit more mails will be sent. Warning letters will be sent out with the foreclosure notices that are related to tax failures. Information will also be available at the offices. A website has been launched atg.wa.gov/foreclosure.aspx that provide detailed information about the way in which these foreclosure scammers operate.

Washington Bank Foreclosures by Top Cities

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Foreclosure scams beginning in California have swept across the country. Federal Investigators are honing in on Kansas. Bogus bankruptcies have been used to cheat house owners as well as lenders. Advantage has been taken of the clause that bankruptcy automatically postpones foreclosures. Bankruptcies are now on the rise.

The danger is that when buyers think they have made a bargain actually they lose their houses when the false bankruptcies find exposure. Lenders lose thousands of dollars by way of legal fees trying to pin down these false bankruptcy filings. Whether bogus or not it has to be proved and the process is time consuming. In Kansas the department of justice is sniffing out at least nine doubtful bankruptcies filed in courts of Kansas, Topeka and Wichita.

More phony filings are surfacing in Maryland, Nevada and Texas and it is only a matter of time before it will be smelt in other states as well.

Foreclosure fraud has resulted in loss of billions. In Kansas alone there are cases involving 3 million. Most are from California – the top ranking foreclosure state. The scam started in the West Coast during the 1990’s when the real estate began to take the downturn course but now it is flowing over to the Midwest aggravated by the foreclosure crisis.

The scammers go into hiding like rats when the feds stamp around. They bide their time and once more surface when the coast is clear – multiplying like festering sores.

The methodology is to approach foreclosure victims with offers about saving their properties for one time fees or monthly payment. That apart the owners are persuaded to give the so-called helpers a legal interest in the unit. Having obtained this, without the knowledge of the original owners, they transfer fractions of the property to third parties. The latter are fictional or straw-buyers. Bankruptcy is filed against the third parties in courts that are thousands of miles away from the property in question. Many homeless people are tempted to take part in the game. The delay lines the pockets of the scammers by way of monthly fees. Because debt collectors are not coming the borrowers think that the foreclosure has stopped; others are made to understand that the monthly fees are paying off dues. Scammers often take over the property and rent it out to unsuspecting tenants who soon get evicted.

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