Scammers Lurking In Murky Foreclosure Waters

January 2nd, 2008

Foreclosures are on the rise across the nation. Following the footsteps of the predators are the scavengers – picking the leftovers and making the situation worse for the unfortunate victims. In a recent release the Attorney General is pressing for legal steps to be taken in the forthcoming session to help control this menace of foreclosure rescue scams. The aims have been outlined in a short video clip on YouTube. It points out that the scammers find out the details of the foreclosure via public records and then they follow it up pressing the traumatized borrowers through mails and phone calls.

The bill instructs that the helping authority must have ready a written contract in which the terms would be clearly stated. One of the conditions is that the house owner is to received a minimum of 82% of the difference between the mortgage dues and the fair market value of the property that would be collected in case of a sale.

The public has been warned that these are wolves in sheep clothing trying to dupe the gullible. The borrower thinks that the house is being saved from foreclosure but in reality the deed is being gifted to the scammer. Once the wolf has the deed he knows how to get a new mortgage valuing more than the old one. He clears the pending dues and snaps up the difference himself. The scammer may even want rent from the borrower. Meanwhile dues on the new mortgage shoot up. The net result is that the house owner loses his home and even the equity after having paid handsome fees for nothing.

There are mortgage rescue fraud hotlines that should be immediately contacted as soon as the borrower smells a rat. The National Consumer Law Center and the Attorney General’s office has given some tips on this matter.

The moment someone or a company knocks claiming to be a mortgage consultant or foreclosure service help providers one should become extremely cautious. Never sign away the ownership. It is termed ‘quit claim deed’. Nothing should be inked without seeking legal advice. Mortgage payments must not be made to anyone other than the lender. Any too-good-to-be-true offer is exactly what it denotes – it is not true but false. Read all the papers and never sign without understanding the matter fully. Foreclosures are not the last words – there are many alternatives to check it.