RSS Blog FeedMore on Mortgage Loan Modification and Mortgage Rescue Scams
Posted at 8:50 PM, Apr. 7, 2009
Harris Real Estate University Published the following on their Blog:
Mortgage And Loan Modification Scams On The Rise….Homeowner Beware!
Mortgage Loan Modification Scams: Typically what is happening is that troubled homeowners are paying $1000…$2000…$3000 UP FRONT and receiving no services. Whats worse, many of these LOAN MOD scammers are collecting the fees and never doing anything to try to help the homeowner. If you are doing loan mods the ethical and honest way you know that you NEVER charge upfront fees. If you are in one of the hand full of states that requires any sort of ‘license’ or ’state approved process’ you must comply.
Mortgage Rescue Scams. This type of thing has gone of for years. Here is the typical scenario: Homeowner is late 90 days+ on their mortgage. They have equity. A mortgage rescue scammer offers to ’save their mortgage. The scammer makes it so the homeowner signs the deed over. Next, the scammer has the seller pay THEM their mortgage payment. Additionally, the homeowner agrees to sign a lease on their former home (remember they signed over their deed). The homeowners is led to believe that the scammer will bring the mortgage current and then make the payments for the homeowners over an agreed period of time. Homeowner is told that they can ‘buy’ the house back from the scammer. What really happens is that the scammer never makes a payment. Keeps the lease payments…and then (when there is equity) throws the now renter out of the house. The house is sold and the scammer keeps the former owners equity. There are many forms of this scam but, thats the basic format.
A News paper report stated:
The U.S. Treasury has announced a new effort to crack down on criminals who prey on people seeking help with their mortgage problems.
On Monday, Treasury Secretary Timothy Geithner reported that government agencies had recently identified dozens of suspicious companies that were running suspicious ads about mortgage foreclosure rescue services.
According to Geithner, the Treasury’s Financial Crimes Enforcement Network has already produced a number of recent leads that are helping law enforcement agencies stop foreclosure scams or further investigate suspicious companies.
Geithner also noted that the Obama administration’s Making Home Affordable program is an important part of its economic stimulus effort, which makes foreclosure fraud an even higher law enforcement priority.
“American homeowners desperately need the relief this program offers, but the very last thing they need is to be taken advantage of as they try to hold on to their homes,” said Geithner.
A report by ABC News said that the FBI is currently investigating about 2,100 mortgage fraud cases, a 400-percent increase from 2004.
The scams typically target homeowners with damaged credit scores who are willing to pay upfront fees to people who claim they can resolve their mortgage problems. Unfortunately, many of these people end up with worse consumer credit in the long run.
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