Foreclosure Fraud

Foreclosure fraud has become a cottage industry, and like other real estate schemes, it comes in various forms. The most common is a foreclosure "rescuer" -- someone misrepresenting himself as a mortgage consultant or a foreclosure service.

How it works:
Homeowners who are having problems paying their mortgage are approached by someone who represents themselves as a mortgage consultant or a foreclosure service. They offer to help these desperate homeowners and get them to transfer the title or deed to them. The unsuspecting homeowner either signs papers that are represented as a loan or the scammers assure the homeowners they can remain in their home and can eventually buy it back.

They may use a sales pitch — such as "I can save your credit!” — while asking the homeowner to pay the mortgage payments directly to them. In some cases, the "rescuer" will also try to collect a fee before they assist the homeowner. In the worst cases, the "rescuer" may also obtain a second loan on the property, take the proceeds and skip town, or rent out the home -- forcing the current distressed resident to be evicted. And while the ownership may have been transferred to the "rescuer," the homeowner still owes the monthly mortgage payments to the bank.

You’ve seen the signs:

                                   *We pay cash for your home.
                                   *We buy ugly and moldy houses.
                                   *We buy homes anywhere, in any condition, at any price.

The fact is, these organizations may pay cash, but they pay a lot less than your home is actually worth. These house flippers turn your home around quickly and sell it at a huge profit. Just as the "rescuers” are not looking out for your best interest, neither are these cash cows.

What to do:
Never sign anything without consulting an attorney, a legal aide, or a credit counselor. These scam artists have the terms fixed in their favor, and if you sign your deed over, getting your home back is next to impossible.
If you believe you are facing foreclosure, the best thing you can do is contact your mortgage company. Banks and other lenders want you to stay in your home and they will work with you to meet your current mortgage obligations. They may suggest renegotiating the terms of the mortgage or, at worst, suggest you sell your home but you keep the equity you have built — not the scammers.

File a complaint:
If you have been a victim of real estate fraud or suspect a person or company that engages in real estate fraud, contact:              

Federal Trade Commission (FTC)  
File a complaint -- https://rn.ftc.gov/pls/dod/wsolcq$.startup? Z_ORG_CODE=PU01

Federal Bureau of Investigation (FBI)
Read about mortgage fraud --   http://www.fbi.gov/publications/financial/fcs_report052005/fcs_report052005.htm#d1
Locations of FBI's Field Offices -- http://www.fbi.gov/contact/fo/fo.htm
File a complaint -- https://tips.fbi.gov/

Mortgage Bankers Association (MBA)
State-by-state list of resources -- http://mbafightsfraud.mortgagebankers.org/reportingfraud.html