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Mortgage Rescue Fraud

 

When homeowners are facing foreclosure and looking for options to bail them out, sometimes they aren’t as fastidious as they should be when researching their options. Although there are a lot of really good programs developed to assist consumers with their home mortgage loans and avoid bank foreclosure, unfortunately there are also mortgage rescue scams and frauds as well.

Warning Signs of Mortgage Rescue Fraud/Scams
  • They offer to pay off the outstanding debt for you.
  • They tell you another lender will loan you the money when your original mortgage holder can’t or won’t.
  • They will buy the property but you can stay in it and get it back later.
  • If you pay an upfront fee, they will stop the foreclosure for you.
  • If you make payments to the foreclosure rescue company, they will make an arrangement with your lender to keep you in the property.
  • They say signing a deed or transfer is just “temporary.”
 Mortgage Rescue Scams/Fraud Tactics

They gain your trust with lies and exaggerations
They use forgery, fraud, and deceit
Affinity fraud – using the “I’m just like you ploy” (old, white, black, Asian, young, etc.)
They prey on the less educated or less sophisticated.
They are often secretive or not willing to provide all the details of the transaction.

 Real estate law is complicated and can vary from state to state. It is important to speak with an attorney who specializes in real estate law before making any hasty decisions.

Avoiding Mortgage Fraud and/or Scams

If it sounds too good to be true, it probably is. Do your homework and check out the company or individual requesting to assist you with your bank foreclosure. The Better Business Bureau or the attorney general’s offices are good places to start.
Don’t sign a  quit claim deed unless instructed by your foreclosure attorney.
Don’t make payments to anyone other than your mortgage lender.
Learn the laws for your state for mortgages and foreclosures.
Only use reputable banking institutions and/or government programs. Use the lender locator on the Federal Housing Administration’s website to find an FHA-approved lender in your area.

However, even with that best of precaution, misdeeds can happen; the US Department of Housing and Urban Development (HUD) recently suspended three lenders from the Federal Housing Administration (FHA). These lenders were suspended from the programs because of serious HUD violations.

HUD suspended the lenders and considered the action to be very important in the protection of consumers. In a press release, they stated, “In taking these actions, the Board determined that due to the serious nature of each violation and the inherent risk to the Department and the public, the suspensions were necessary to protect the financial soundness of FHA’s insurance fund.”

Suspended Mortgage Lenders
  • Golden First Mortgage Corp of Great Neck, NY
  • Great Country Mortgage Bankers, Inc. of Coral Gables, FL
  • Beneficial Mortgage Corporation of San Juan, PR
How to Report Mortgage Fraud or Scams

After you have discovered that you have been scammed or defrauded, report the deceitful company to the Attorney General in your state, your state’s licensing agent for real estate, and the Federal Bureau of Investigation (FBI).

Never sign a deed or transfer the property. Once that has occurred, the action is final and you no longer own the property, but you are more than likely still responsible for the mortgage loan. If anyone contacts you out of the blue to assist you with your foreclosure process or with mortgage payments that are behind, they should be suspect to you. It is far better that you contact an experienced real estate lawyer who specializes in foreclosure law. The real estate attorney can advise you of the best options for your particular financial and housing situation.

Since real estate law is complicated and can vary from state to state; it is very important to speak with an attorney who specializes in real estate law before making any hasty decisions.
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