Foreclosure Fraud On The Rise.

There has been a dramatic spike in FORECLOSURE and LOAN MOD SCAMs.

Mortgage Loan Modification Scams:  Typically what is happening is that troubled homeowners are paying $1000…$2000…$3000 UP FRONT and receiving no services. What's worse, many of these LOAN MOD scammers are collecting the fees and never doing anything to try to help the homeowner.  Honest and ethical loan modification consultants do not charge upfront fees. 

Mortgage Rescue Scams.  This type of thing has gone on for years.  Here is the typical scenario: 

• Homeowner is late 30 days+ on their mortgage. 
• They have equity. 
• A mortgage rescue scammer offers to ’save their mortgage', 'save their credit', and 'save their home'.
• The scammer persuades the homeowner to sign over the deed. 
• Next, the scammer has the homeowner pay THEM their mortgage payment. 
• Additionally, the homeowner agrees to sign a lease on their former home (remember they signed over their deed). 
• Scammer leads the homeowner to believe that the scammer will bring the mortgage current and then make the payments for the homeowner over an agreed period of time. 
• Homeowner is told that they can ‘buy’ the house back from the scammer. 

What really happens?

• Scammer never makes a payment.
• The scammer keeps the lease payments …
• and then (when there is equity), scammer throws the now renter out of the house. 
• The house is sold.
• Scammer keeps the former owner's equity. 

There are many forms of this scam but, that's the basic format.

Here is the news report:

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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