Homeowners fall prey to conmen promising a life without foreclosures

The US economy is going through one of its challenging times. With unemployment at its zenith, people are faltering on loan payments. As a result, foreclosures have become very common. As homeowners are desperate to save their homes from foreclosures, they fall prey to all kinds of conmen who promise to negotiate with banks in return for an upfront payment. No sooner than homeowners make the payment do these conmen vanish into the blue.
Take for instance, the case of Rene Ruelas. The couple’s home at Buena Park was heading towards a foreclosure and Rene who was a mechanic just did not know how to stop the inevitable. He had not received his pay cheque for the month.  It was at that moment that he got a call from an agency who promised to negotiate with the Ruelas’ bank in return for an upfront payment. The agency promised to do the footwork. After Ruelas made a payment of $4,000, he never heard from the agency again. So his hopes of modifying the home loan just crashed.

Now the case of Ruelas forms part of a campaign initiated by Federal Trade Commission asking people to be cautious of conmen who are taking advantage of the depressed economy to make a steal. In fact, the photo of the Ruelas features on the cover of the DVD being made by the Commission.

This DVD was unveiled along with a few lawsuits to drive home how the people are being duped. This forms part of the Operation Loan Lies campaign initiated by state, federal and local bodies.

California Attorney General Jerry Brown says at present the number of scammers is definitely more than the government officials. The FTC chairman Jon Leibowitz says the weeding out operation has begun for weeks. Till now, 189 lawsuits have been recorded in twenty states.

Prosecutors in California have already brought to book 14 companies who were into the business of modifying loans. These firms charged fees of around $500 to $5,500 for modifying loans and they never turned up after the house owners coughed up the amount.

A victim confessed that she was assured of a 40 per cent decrease in mortgage principal in return for a payment of $3,500. She soon learnt that he modification request was turned down and the agency copied her signature and gave false information to the bank.

The focus of the federal authority is to stomp out such irregularities.

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