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Mortgage Scams And The Consumer

 

There has always been scams out there that involved mortgages, however, with the situation today more and more scams are preying on those facing foreclosure. As published by MSNBC on May 28, 2009, “The ongoing mortgage foreclosure crisis has sparked a cottage industry of so-called "foreclosure rescue" companies. But advocates and government officials warn that a significant number are little more than fraudulent operations designed to separate distressed homeowners from their money, and sometimes their houses as well.”

With this growing problem, consumers need to be aware of the various scams as well as the best way in which to protect themselves against the fraudulent companies.

The top three mortgage scams as of today includes:

"Equity Stripping" also called "Bailout” – The criminal will tell the homeowner they will sell their home, buy their home, or whatever in order to help them rid themselves of the home and the mortgage payment. The homeowner must sign the title of the home over to the criminal who states they will allow the owner to stay in the home and rent the home. At a later date, when the homeowner is able, they will be able to purchase their home back. Of course, the homeowner never receives the chance to buy their house and in many cases are evicted by the one that was helping them keep their home.

“Phantom Help” – You may receive a telephone call, an email, or even visit a website offering to help you by representing you during the negotiation process to save your home from foreclosure. You will have to pay all kinds of fees for the company to contact the lender, which you could have done yourself, and in most cases, no telephone calls or paperwork was done to help you save your home. During this time, you will be told to ignore all telephone calls and notices from the lender as they are working for you and they will take care of the problems.

Bait and Switch – In most cases, you will be contacted by a person or person pretending to be housing counselors. These counselors will have all kinds of documents, which they explain are for new loans that will solve your crisis. Of course, you must sign over the title of your home to this company that has just received your signature on forged documents that mean nothing, but they now own your home. They can and will evict you since they own the property. Even though you signed the title, you will still owe the mortgage loan to the lending company.

To ensure you understand the laws governing foreclosures and the various scams present today, you should contact a foreclosure attorney or real estate attorney.

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