Mortgage-relief scams on the rise
A nonprofit housing agency says reports of fraudulent relief schemes are up almost 60% this year. Beware of companies that ask for money upfront.
As federal programs to help homeowners avoid foreclosure have increased this year, so have foreclosure-relief scams.
The nonprofit Homeownership Preservation Foundation reported last week that reports of mortgage foreclosure scams have jumped almost 60% this year.
“Regretfully, every new government initiative spawns a slew of foreclosure avoidance scams, often from the same cast of characters doing business under various names to avoid easy detection and identification,” said Colleen Hernandez, CEO of the foundation, in a news release. “Most of these scams involve individuals supposedly offering mortgage foreclosure avoidance assistance that trained HPF counselors provide at no cost. Sadly, with most scams, no meaningful services are ever provided.”
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Last month, the Federal Trade Commission got a federal judge to shut down a California operation that allegedly scammed homeowners out of more than $1 million with false promises to help them avoid foreclosure.
In those cases, the companies, owned by Sameer Lakhany of Santa Ana, Calif., and operating under a variety of names and with multiple websites, were running two types of scams:
- A traditional mortgage-relief scam in which they charged homeowners $795 to $1,595 for "forensic loan audits," which the swindlers said would force their mortgage companies to give them loan modifications with favorable terms. According to the FTC, the company representatives falsely portrayed themselves as employees of a nonprofit housing counseling agency or HUD-certified housing counselors. The representatives said the homeowners' loan modification applications would be substantially delayed if they did not have such a forensic audit.
- A scheme in which they promised homeowners they could stop foreclosure by joining "mass joinder" lawsuits challenging their mortgages. According to the FTC, the group masqueraded as a law firm called Precision Law Center and charged homeowners $6,000 to $10,000 to join the suits but provided no services.
In general, legitimate mortgage-relief efforts don't involve an upfront payment. Federal law bans upfront fees for negotiating mortgage modifications in most cases.
They are too big too fail ! Another Obamma Failure of leadership gone wrong . The Housing and Banking
Fiascos were the direct Failure of leadership that a Community Organizer could not have known how to deal with, because he hd no experience of any kind ! Voting "Present" does not make you Presidential
Morgage relief scammers deserve a taste of their own medicine. They shouldn't get off easy with just a few years in jail. They should have to pay rent on the properties they scammed, say double the morgage payments, until the owners get them back free and clear. The IRS should put them in a 1,000 per cent tax bracket on their stolen money with hefty late pay fees and tax evasion fines if they miss the two second filing deadline. When they go to jail, they should pay rent on their cell equal to the combined mortgage on all the homes they ripped off.
Scammers love wrecking other peoples lives so they deserve to have their own ruined. They've earned it. If they don't like it they can change their names to one of their great heroes. May I suggest Hitler, Stalin, or Pol Pot. If they won't pay, then they should become citizens of North Korea, whose government they love.
Scammers should suffer the consequences of their crimes. Sending them to jail for 10 years or so is like letting them pay one cent on a billion dollar debt and getting to keep the rest.
This is funny. People with mortgage problems, (myself included) have already been scammed by the banks. I guess at this point in history, scamming is okay.
PS, to gmac, we're not done.
What rights does a holding company that paid a s 7000.00 debt on Chase mortgage. The home was bought by me at 149,000, I put up 75,000 equity. the existing balance is 68,000. I have checked with the bank and chase is still 1st on lean, loan is still in my name. What do I need to do to get the holding company off my loan. . No modification. My loan amt is 958.00 a month, but I have been having to pay the holding company 1,400.00 a month since 08/2011 and can nolonger afford this.Again I checked with the bank, my name is on the loan, chase still owns the loan. Where do I go from here, I can't afford a lawyer . I am now 23 days behind on loan.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.