Learning Center » Foreclosure Scams

Foreclosures Going Hand in Hand With New Scams

Julie Parker — Tue, 21 Sep 2010 12:52:08 +0000

The regulators have clamped down stringent laws for lenders – license and checks on backgrounds. Many of those who could not qualify have now either dropped out or hitched on to another ship.

Previously no license was required for firms that engaged in foreclosure rescue or loan modifications. The advices given by many were dubitable. The house owners facing foreclosure were mostly advised to stop making mortgage payments. It was totally wrong. Other firms demanded advance fees and once that was got they vanished. California State debarred many attorneys for indulging in these sorts of tricks. It led to the laying down by the state of many strict rules. Maryland was the first to bar advance fees.

There are genuine attorneys who know their work and are specialized in foreclosures. But locating them proves to be difficult. Relying on the wrong group would result not only in the loss of dollars but also credit points as well as the house. One of best places to seek help is to knock on Better Business Bureau and Attorneys General Offices.

The latest scam is Forensic Mortgage Audit trick. Here again some genuine firms are there but many are lay persons who are using software to determine facts that are not quite up to the mark – it being less powerful than the one used by the related lender. Hence how can it locate an error?

The rule of thumb is to stay away whenever the question of advance fees comes up.
According to the FBI in this year the top white collar offences are related to mortgage fraud. There are new scams surfacing everyday preying on desperate house owners. The present economic climate presents an ideal hunting ground for them. In a report the Federal Trade Commission (national consumer protection body) has stated, “Fraudulent foreclosure rescue professionals use half-truths and outright lies to sell services that promise relief to homeowners in distress; the latest foreclosure rescue scam to exploit financially strapped homeowners pitches forensic mortgage loan audits”. It warns that offers are made to review the house loan documents in exchange for advances fees running into hundreds of dollars. They claim to find out whether the bank complied with lending laws of the state or the federal government. It is claimed that this audit report will put brakes on the foreclosure or expedite modification of the loan and even reduce the principal loan; sometimes the loan is even cancelled.

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The Latinos are Being Preyed Upon by Foreclosure Scammers

Julie Parker — Mon, 09 Aug 2010 12:14:19 +0000

The foreclosure crisis has ravaged the entire nation but it is the Latinos that are being focused and preyed upon by the vultures or the foreclosure scammers. They sniff out those who are defaulting and are in imminent danger from foreclosure. Latino families are especially vulnerable.

One of the victims is Angel Blas who had bought his house in 2002 in Everett, Massachusetts – a suburb of Boston. He and his wife had worked hard and saved money to buy the property. In his early fifties Blas, originally from Peru said, they had a dream about America, of finding good jobs, of attending school, of learning the English language and getting a property and finally settle down. His dream nearly became true when he walked into his house but when divorce broke up their home and finances got tight.

Towards the close of 2009 he failed in being current on his mortgage and thought of refinancing. Before he could proceed, his legal firm United Law Group contacted Blas saying they are aware of his problem and had a good plan for him to solve the problem. The person spoke in Spanish making Blas feeling comfortable. Promises were made about negotiating and refinancing. But the cost was hefty – upfront fee of $3,500. Apart from taking the money, the firm did nothing.

United Law Group turned down repeated interview requests. It is now being investigated by U.S. Postal Inspection Service and the FBI apart from others. Last March there was a raid on its California office but it is still running its business.

Blas is getting the help of Greater Boston Legal Services to sort out his problems. Nadine Cohen of consumer rights unit of the services said that there are many others like Blas who are being helped. She said, “The same people that we see targeted by these foreclosure rescue scam companies are the people targeted by the sub-prime loans: lower income people, people who are unsophisticated in mortgage matters, and people who don’t always speak English”.

The problem is not local but national. The Latinos are primarily being target. There are large Hispanic communities in California and Nevada and they are particularly exposed to these scams as property prices tumble and foreclosure numbers spike. Cohen said that any concern that takes upfront fees for modifying loans cannot be a genuine organization. The borrowers should knock on the doors of housing agencies that proved counseling for free; even free legal services are offered. They will just be walking into a trap if they do otherwise.

Thousands in New York have been Victimized by Nefarious Rescue Scammers

Julie Parker — Wed, 07 Jul 2010 11:14:27 +0000

Andrew Cuomo, the Attorney General of New York is dispatching over 180 letters (cease-and-desist) to companies claiming to help foreclosure victims with a stern message of warning that they must immediately put brakes on all illegal activities.

The present actions of the AG exposed the routine operations of many firms that collect illegally upfront charges from the house owners who are facing foreclosure but fail to do anything about it – the monthly payments are neither reduced nor their houses saved. Thousands in New York have been victimized by these nefarious so called rescue scammers.

Cuomo said that that notice is being given to these dubious rescue firms so that they immediately stop preying on the foreclosure victims otherwise they should be prepared to face all consequences.

He said, “The business model for many mortgage rescue companies is based on false promises, but the true cost of their deception is all too real. When faced with the threat of foreclosure, New Yorkers should remember the rights they have as homeowners and the protections that my office ensures.”

These notifications of the Attorney General is being forwarded to 182 firms warning them about charging fees for consultation prior to action, failing to execute written contracts in the language the house owners are familiar with and for not being transparent about why the fees are being charged and what specific services would be provided.

They were also accused of not permitting the house owners to cancel contracts without being penalized within five days of the inking of it; moreover this right is not mentioned in the contract.

They are forbidden to continue with using false and confusing advertising operations where false guarantees are given regarding rates of success, 100% return of money in case of failure and fabricated testimonials from consumers.

Also they are warned about advertising themselves wrongly to be affiliated with the government or connected with programmes sponsored by the government.

In the website of the AG, information is given about how to recognize these scammers, what are the important stages of foreclosure and a list of reliable agents who can be contacted for genuine help.

The foreclosure mayhem has swallowed up houses by the thousands across New York State. In May alone 2010 there were 64,778 foreclosures in New York calculating to a ratio of 1:1,982.

The Attorney General is determined to forcefully implement the prevailing laws against such false foreclosure rescue firms who are taking advantage of the vulnerability of the foreclosure victims.

Foreclosure Fraud causes Scammers to face Penalty of $3.3 Million

Julie Parker — Fri, 25 Jun 2010 11:51:32 +0000

Two foreclosure fraud causes scammers are facing a penalty of $3.3 million. In the eye of the storm are two business persons who tried to cheat a woman who was disabled in a so-called rescue scam, according to D.C Court of Appeals.

In 2003 Maria-Theresa Wilson found herself served with a foreclosure notice. A preacher who had formerly been a convict, Calvin Baltimore approached her saying that he would assist her to save the house that was her home.

Wilson was under the impression that Baltimore would be taking a loan from Vincent Abell, his boss. Without being conversant fully about the matter, she signed over the title of her property to Abell. When she raised few questions as to why she was being made to sign it off, she was told that this part was required ‘legal fiction’ to ward off foreclosure.

Subsequently Wilson turned out to be a tenant in the house that she had previously owned while remaining on a hook regarding the mortgage. Abell had paid $42,000 to make it current. Wilson is disabled – suffers seizures since the time she injured her head. She also has to care for her old mother. When Wilson failed to pay the rent Abell threw her out of the house.

Later on Wilson brought legal suit against the two, Baltimore and Abell, as well as Abell’s firm – Modern Management Company. She won the case and the jury has granted her damages worth $3.3 million.

The two scammers appealed that the penalty was too steep because it seemed that they were being punished by the jury, for deals they had made with previous house owners.

In 2008 five residents of the district came to settlements out of court with Abell. They managed to get back their houses and were given $455,000 as per a report by Washington Post.

However the Appeals Court did not agree that the jury had been unfair and said that Abell together with Baltimore had behaved in a recklessly indifferent manner. The lawyer representing the two scammers could not be contacted for comments.

The lawyer representing Wilson, Tom Connally, was “delighted” with the ruling of the high court. He said, “It was an important ruling both for our client and for similarly situated victims of foreclosure scams.”

The infamous duo are also facing legal charged in court over a similar scam involving a person who had become delinquent on the house loan after loss of job. Two decades previously Abell had served a prison term for involvement in an insurance loan cheating case.

Elders Target of Foreclosure Scams

Julie Parker — Wed, 23 Jun 2010 12:50:56 +0000

It seems seniors are not spared either foreclosures or scams related to it. A couple advanced in years, has been made to pay 65% interests. Thanks to this nefarious scheme the two are now about to lose their house in Calgary.

They were made to agree to taking out a string of loans at this abnormal rate of interest. The police said that the scheme transgressed the law. The police are now hunting for a man aged about 38 years related to this swindle involving mortgage loans.

According to the police, the couple living off fixed earnings received many uncalled for telephone calls in 2006 from a man who was offering loans that would give them some cash to handle. They agreed to the proposal and offered their house as security.

In 2007 June the couple knocked on their lawyer and inked contracts. They were under the impression that the documents related to reverse mortgage. But actually they signed off their house to the man who is now absconding. The person however has started with foreclosure proceedings and trying to take over the house.

Const. Karen Moffatt said, “Contracts, they can be confusing. The wad of paper that you get from the bank is lengthy enough, so they were confused by it. They were told one thing and signed a contract for something else.”

The investigators are surmising that the couple was pressurized often from 2006 to 2009 to take more loans. They finally ended up with loan amounting to $84,000 paying an interest of over 65%. They owe the suspect nearly $150,000 according to the police.

In the eye of the storm is the suspect, Richard William Hoffman who is facing charges for unfair practices as per the Fair Trading Act of Alberta; he is also facing criminal charges for unfair imposing unfair interest rate. As per the criminal code it is against the law to take more than 60% interest annually.

The investigators have been able to establish contact with Hoffman over the telephone, but as yet have failed to find where he is currently located. A photograph of Hoffman has been released recently. The police are hopeful that this will help them them track him down.

Currently the elderly couple are still residing in their house but battling foreclosure through a civil suit. It poses the question as to how the court can allow such a foreclosure to proceed and what is the role of the bank that is doing the foreclosing?

Attorney Under Investigation for Foreclosure Rescue Scam

Julie Parker — Mon, 04 Jan 2010 12:31:55 +0000

The Florida Bar Association is investigating the activities of an attorney of Coral Springs for involvement in foreclosure rescue scam. There are suspicions that many such lawyers have tied up with modification firms as partnership to skirt upfront legal fees. Trade regulators are continuing to file suits against lawyers involved in such types of operations.

The bar officials said they are carrying out investigations against Karen Grun and her links with Housing Assistance Law Center of Deerfield Beach. Legal action has been filed against the firm and three of its affiliates last July stating that they took illegal payments as advance. In many cases they gave a guarantee that the mortgage would be modified within thirty to sixty days.

The bar has stepped up its enquiries regarding understanding between foreclosure rescue firms and lawyers. Their activities ignore state laws regarding upfront fees for loan modification. The Florida Bar Association that supervises the doings of lawyers and disciplines them, started 195 cases in 2009 focusing on the nefarious rescue operations. Real estate Susan Spurgeon said, “They’ve really put a lot of heat on attorneys who were doing this.” She has been lecturing on modification of mortgages.
Grun refused to reply to messages sent over the phone by Sun Sentinel both to her residence and office.

Daniel Henry Fox, a real estate attorney of Aventura was barred after the results of an investigation came out against him. It was charged that he deserted some of his clients who were relying on him for loan modification. The telephone connection of his office has been disconnected. He did not reply to e-mails sent by Sun Sentinel.

On the documents of Housing Assistance Law Center was given the name of Grun and the statement that it was ‘a private law firm.’ She is listed as the director cum president of the firm from April to June. Since then the firm has been dissolved and its phone disconnected.

Recently the regulators of the state filed a case in Miami-Dade Circuit Court against three modification operations involving three lawyers – David Botton of New Jersey, Ryan Matthew Grant of Dallas and Brian Michael Rokaw of Miami Lakes. None responded to e-mails or telephone calls. It is alleged that firms took about $1,299 as advance payments in transgression of state laws forbidding the same. The clients had to send extra dollars as fees to escrow accounts while being falsely assured that they were being legally represented. The state is pleading to the courts to halt the firms from continuing with their businesses.

Foreclosure Scam Stories

Julie Parker — Mon, 05 May 2008 13:18:28 +0000

More and more house owners who were and are victims of foreclosures are coming out with foreclosure scam stories. Many companies came forward with rosy promises of helping to prevent foreclosures but ultimately nothing happens except that the victims find themselves poorer.

The story of Chantae Grandsberry of Brooklyn Center is one of many. She was hunting around for someone to help her save the house that was her home. Her searches took her to an Oklahoma firm and at that time she believed that she had knocked at the right address. The firm was freely quoting from the Bible on its website and introduced themselves as foreclosure prevention specialists who believed in Christian values. Grandsberry and her husband were taken in by these holy platitudes. At that time Chantae was expecting a child and believed that those who cited the Lord could not sin. But in a short time she lost her house last October when the company – American Foreclosure Specialists, failed to keep their promises. They had taken $1,200 in advance although this was in violation of Minnesota law, commented the Attorney General of Minnesota, Lori Swanson.

In the beginning of the month Swanson filed law suits against American Foreclosure Specialists and three other firms – all being based outside the state. They had violated the law by collecting fees even before providing services they had promised to do so. Here the matter did not end. Because of their tall talk, the house owners lost time and more funds trying to salvage the foreclosure hit wreckage. Thus these scammers made a bad situation even worse. Swanson filed the suits in the District Court of Hennepin County. She is also trying to prevent these scammers from operating in Minnesota. This is part of the general programme the Attorney General has taken up to sieve out the fraudsters and cheaters.

The cases were registered against American Foreclosure Specialists, National Foreclosure Relief of Nevada, Lewis Loss Mitigation of Alabama (also operating as Stop Foreclosure and Lewis and Associates Consulting), D.R. Financial Services of California (also working as D.R. Financial and Superior Home Loans), Mortgage Default Assistance of Florida and Home Assure of Florida.

Despite official measures being taken against the scammers, it is essential that the people become aware of the rising number of cheats and tricksters. In fact their numbers are rising with the number of foreclosures. The foreclosure notice traumatizes the victim who cannot think clearly.

Illinois Foreclosure Scammers

Julie Parker — Mon, 28 Apr 2008 12:56:52 +0000

The story of Dorothy Galbreath and foreclosure scammers is just one of the many dotting the scene – the stuff out of which novels are woven speaking of the times.

Doroth, a bus driver, had been married for long 43 years when death took away her husband. He had built her a house in University Park, Illinois. His death plunged her into financial troubles and she had a trying time keeping the foreclosure wolf from knocking at here door. Desperate she sought the help being offered by a company – Alternative Options. The end of the story is that today she has lost the house that had been her home. Alternative Options, took advantage of her age and vulnerability. She hardly had words to describe her situation. It was like being ‘crushed’ she said.

Legal experts opine that Dorothy became the victim of a typical foreclosure scam. The scammers operate in two ways. In the first kind a smart talking agent appears representing a company that may or may not exist. The person offers to negotiate with the lender to bring down the mortgage payment to an affordable figure. For this a hefty fee is taken after which the scammer vanishes; nothing is done. The second type of scam is even more dangerous. The firm promises to save the house from foreclosure but the borrower has to sign over the title to the rescuer. This is what happened to Dorothy. She was made to believe that Alternative Options would help her refinance but after waiting for a month she found herself falling further behind in payments. By the time she learnt of the fraud or even got suspicious it was already too late. It was not until she sat down across the table with Alternative Options that she came to know that the plan was to write over the title of the house. It was a psychological moment and she was rushed through it. The confidence building had been done previously. She found that she had sold the house at less than the market value. The company then leased it back to her and she was allowed to stay on as a tenant. But the rent was higher than the mortgage she was paying. She had the option of buying back her house but the price was exorbitant – $37,000 more than for what she had sold it for!

Hennepin Sues Foreclosure Scamming Firm

Julie Parker — Wed, 23 Apr 2008 12:57:37 +0000

The Attorney General of Hennepin stated that some consulting firms have been duping foreclosure victims with promises of help. Six firms located outside the state have been charged by Hennepin County District Court. Injunction is being sought to prevent them from continuing with their business in Minnesota while the court proceedings are in progress. In the suits it is stated that these firms violated the laws of the state by raking in handsome fees for services they promised to deliver. But in reality they did nothing of the sort. As a result of this this foreclosed suffered intensely. More money and time was lost that ultimately led to the very thing they were trying to avoid – eviction.

Attorney General Lori Swanson commented that these firms ‘made a bad situation even worse.’ The companies were blatant enough to host websites advertising their claims. They also used direct mail services to make contacts with the house owners and sweet talked their way into the traumatized hearts of their prey. In each particular case these firms asked for consultation fees ranging from $1,000 to $,2,400. However they slowly made more demands matching further promises from clients who were already neck deep in debts facing and foreclosures.

These scammers approach at the point when the victim is first hit with the news of foreclosure when fear and despair traumatize sanity. Lonnie Sievert lost her house in Brooklyn Park to foreclosure. Her situation was made worse with these cheats. The trio against whom law suits were filed were National Foreclosure Relief of Nevada operating in California, Lewis Loss Mitigation of Alabama (using many names like American Foreclosure Specialists amongst others), also in California and Home Assure of Florida.

Each individual has a story to tell, Terry Lake is one. She has filed for bankruptcy in an effort to save her house. She gave something around $2,400 to one of the trio for this advice of filing bankruptcy. Another person, Lake, had more or less the same story to tell. Intuition had warned him that the promises were false and yet he got taken in by smart sales talk. To add sacrilege to injury the website of the American Foreclosure Specialists underlined the fact that the firm was run by Christians quoting lines from the Bible. One of the victims who chose this particular firm for its religious tone was Chantae Grandsberry of Brooklyn Centre.

Foreclosure Scammers Increasing

Kevin Simpson — Wed, 14 Nov 2007 10:57:37 +0000

As foreclosures are increasing so too are scammers. Smart talking rescue teams promise to save the house and ultimately walk away with the purses of their clients.

As the numbers rise a trend and pattern can be noticed. This has led BBB or Better Business Bureau to give out gloomy warnings that with more foreclosures in the offing more people will lose whatever is left to these vultures preying upon the vulnerable.

It is estimated that about 1.7 million will face foreclosure in the coming years. The victims will be in such a traumatized desperate state when they will clutch at any bit of straw to survive. This is the exact stage set for scammers to play out their part and pick the bones clean.

In the past few months BBB has had reports pouring in about these con men from all the 50 states. States suffering from the highest numbers of foreclosure like Georgia, Colorado and Ohio are registering the most number of scammers posing as foreclosure rescue teams.

The con rescue artists contact the foreclosure victims either directly or attract them with their websites. They make tall promises of contacting the lender and negotiating fresh amicable terms to bring about a stop to the foreclosure process. If they fail to do so they promise to refund the fees they had collected from their clients. Some of the victims have paid even $1,300 hoping for the best. After sometime when they realize that precious time and money has gone it is too late to do anything. Refunds have vanished into thin air together with the artists.

BBB is repeatedly hearing the same story. The scammers are artists par excellence. They dupe their victims into a false sense of security and hypnotize them like what the snake does to a bird. Unfortunately scammers are adding insult to the injury of foreclosure and giving the deathblow to the sick and dying. A lot of money is going down the drain as well as precious time that may well have been utilized to forestall foreclosures.

As a precautionary measure BBC warns people never to trust the personal approach but to directly contact BBC over the web or check with the Attorney General and or the Real Estate Commissioner of the State. Never sign documents without legal advice and above all directly contact the lender without any wastage of time.