Skip to comments.Scammers Pounce On Home Foreclosure Victims
Posted on 08/27/2007 5:08:43 AM PDT by Calpernia
The volatile sub-prime mortgage market has resulted in thousands of people being scammed by fake mortgage foreclosure rescue companies that promise big results, but end up draining the wallets of those who are about to end up on the street.
Homeowners say they were either contacted directly by a mortgage foreclosure rescue company or came across a web site while searching for help to stop foreclosure on their home. The companies claimed they would re-negotiate the terms of their mortgages and stop foreclosure actions.
Many paid as much as 13-hundred dollars with nothing to show for it. Melissa Companick of New Jersey's Better Business Bureau says to always check with www.bbb.org to make sure the company is legitimate. She also advises people to never sign a contract under pressure...and to talk to your lender first.
Arlington, VAAcross the U.S., homeowners facing mortgage foreclosure are being scammed by foreclosure rescue companies promising to save their house but that only take their money. In light of this emerging trend, the Better Business Bureau (BBB) warns that gloomy forecasts for the housing and financial markets means that increasingly more people could fall prey to mortgage foreclosure scams in the coming months and years.
According to estimates, as many as 1.7 million homeowners could lose their house to foreclosure in the next couple years, said Steve Cox, spokesperson for the Better Business Bureau. These people will be in the desperate position of trying to save their home and theyll look for someone to trust. Unfortunately, con artists are seeing their chance to step in and make a fast buck off of troubled homeowners from Palm Springs to Pittsburgh.
In recent months, the BBB has heard from victims of foreclosure rescue schemes in almost all 50 states. Not surprisingly, states with the highest foreclosure ratessuch as Georgia, Colorado and Ohiohave an exceptionally high number of complaints for companies offering foreclosure rescue. BBBs nationwide have received hundreds of complaints from homeowners who enlisted the help of unscrupulous mortgage foreclosure rescue companies and they all tell a similar story.
Typically, homeowners report that they were either contacted directly by a mortgage foreclosure rescue company or came across a Web site while searching for help to stop foreclosure on their home. The companies claimed they would renegotiate the terms of their mortgages and stop foreclosure actions, or the homeowners would get their money back. Victims, who were desperate to keep their homes, paid as much as $1,300. In the end, the companies did very little work or often nothing at all. Most victims, not only lost their homes, but they also have not been able to get promised refunds, either.
In the last three years, the Clearwater, FL BBB received 508 complaints for foreclosure services headquartered in their area. Of those complaints, 322 came within the last 12 months. The total amount of refunds requested by the complainants in the Clearwater area amounts to more than $600,000.
The Charlotte BBB reports that last year only two mortgage foreclosure rescue companies operated in the Charlotte area, but now the number has now jumped to 15six of which have government actions against them including cease and desist requests, temporary restraining orders or consent judgments.
The Cleveland BBB reports a similar dramatic increase21 new companies offering mortgage foreclosure rescue opened in the Cleveland area in the past year alone.
BBBs across the nation are hearing the same story from victims over and over again. added Cox. Desperate homeowners are duped into a false sense of security by crooked companies and think their prayers have been answered and their homes will be saved. Unfortunately, many people are losing a lot of money and their houses through untrustworthy foreclosure rescue operations.
The BBB offers the following advice for homeowners facing mortgage foreclosure:
Contact your BBB or go to www.bbb.org to request a free Reliability Report before paying any rescue company. You can also check with your state Attorney General and state Real Estate Commission.
Beware of the personal approach. Some less-than-ethical businesses will stuff a handwritten note in your front door or mailbox that implies that help is available from someone who has your best interests in mind.
Talk to your lender. The first thing you should do is talk to your mortgage company about how to restructure your loan payment or refinance.
Never sign a contract under pressure and never sign away ownership of your property. Ask a trusted family member, your attorney or a financial professional to review any paperwork you may be asked to sign.
If you feel you have been taken advantage of by an unethical mortgage foreclosure rescue company, file a complaint with your BBB at www.bbb.org.
We need more gov't intervention the markets.
To protect the children from mean ol' Republicans!@
I don’t think the BBB is an arm of the government.
They were dumb enough to buy over priced homes out of their budget and signed variable rate mortgages. Once a fool, always a fool and ripe for these scammers.
There’s a current tv commercial from some financing company or something. I don’t know the name because I’m usually hollering at it too much to notice. Anyway, a hispanic woman with a distinct accent saying, “It’s not my fault I can’t make my home payments”. Excuse me? It’s certainly not my fault but the rest of us will have to bail you out one way or another. I highly suspect it’s directly aimed at those illegals who the banks were shelling out loans to left and right. Totally disgusting.
Life's tough. and if you're stupid it's even tougher (John Wayne)
A friend refinanced their house through a local boiler-room type home-refi outfit, which wrote a new mortgage, sold it to Wells Fargo, but never paid off the old mortgage. As a result, my friend had two mortgages on his house instead of one, and two mortgage holders demanding to be paid.
Things got real ugly, real fast. Send lawyers, guns and money, because the sh!t has hit the fan. He wound up paying both mortgates while things sorted themselves out. At the end of the day, Wells Fargo walked away from $450,000, and my friend is back to his original mortgate, about $20K poorer.
Gee, a stupid person was taken more than once??? I thought there was a one-stupid-transaction limit per stupid person, and then you were “innoculated” against further stupidity.
I just caught thirty seconds of Good Morning America, featuring Jane So-And-So who is “a recent VICTIM of falling home prices” because she (GASP!) had to lower the price of her home to less than she paid for it.
She’s not responsible for her free decision to pay more for her house than it was worth, nor is she accountable for the consequences. No, the poor thing was victimized by evil forces beyond her control or foresight.
Look for the “underwater homeowners are victims” meme to get ever-wider play in the press. The mortgage scams are unfortunate and reprehensible, but news about them will be pressed into service and made to fit the socialist agenda as well.
Will the IRS consider the forgiven mortgage income?
You two beat me. And quite eloquently, I might add.
The thread is a heads up on rescue scams.
Yes. Unless they file bankruptcy.
I understand, but we are warned against religious hucksters and folks still send money to Benny Hinn.
They say you can’t fool an honest man, or something like that. The converse is you can always fool a greedy man.
Spreading the word can save some though.
Goodness! It is not a complete screw-up until the IRS is involved!
Since he never got the money from the first mortgage pay-off, I think my friend is in the clear from the IRS. I don't know how much of his lost money he will be able to deduct as interest, though. I dare say his lawyer is going to earn his money preparing this year's tax return.