Mortgage foreclosure is a frightening prospect for any homeowner. The process of a mortgage foreclosure is confusing, intimidating, and stressful. Many homeowners do not know where to turn for help or who they can trust. All too often confused homeowners are scammed by crafty con artists and scam loan modification companies seeking to capitalize on homeowner anxieties regarding foreclosure.
- These companies are not usually licensed or certified in the State of Florida in any profession.
- Many of these companies are fly by night operations attempting to pose as attorneys or as other real estate professionals.
- They may use clever or professional sounding names along with promises that often sound too good to be true.
- Unfortunately, homeowners victimized by these foreclosure scams are looking for help to save their home, but end up defrauded out of thousands of dollars and losing their home.
Foreclosure rescue fraud happens when a company or person promises to help save a home from foreclosure, but is actually intent on stealing either the property, the equity accumulated in the property, or a substantial amount of money as fees, under the guise of offering foreclosure rescue services.
Savvy Homeowners Should be Aware of Several
Common Fraud Schemes
One such fraud scheme is the "foreclosure prevention specialist scheme." Under the "foreclosure prevention specialist scheme," phony foreclosure counselors will attempt to collect large sums of money, often up front. These "counselors" may represent that these monies will be held in escrow or offer a money-back-guarantee. High-pressure sales tactics, unrealistic promises, and counselors that come across as a "hard sell" are often warning signs that the homeowner is dealing with an unsavory company or individual.
For those unfortunate homeowners that are victims of these services, the result is often that the foreclosure is not prevented, the fees are not held in escrow or refunded to the victim, and the homeowner does not receive any tangible benefit or actual service from the company.
One such company, "Keep Your Property, Inc.," has come under investigation with the Attorney General's Economic Crimes Division for its alleged role in a "foreclosure prevention specialist scheme."
"Keep Your Property, Inc." allegedly guaranteed it would file any required paperwork with the homeowner's mortgage company preventing future foreclosure action, lower the homeowner's current interest rate, and lower the balance of the homeowner's mortgage payments.
The company also allegedly told homeowners to stop making payments to their mortgage companies. It was only after contacting the lenders that the victims allegedly realized that "Keep Your Property, Inc." had done nothing on their behalf.
It only became apparent after the scam that these victims should have been suspicious of "Keep Your Property, Inc's" upfront fee of $2,200 and a monthly fee of $550.
Another scheme is the "phantom help" scheme, which is where individuals or companies charge high fees for work the homeowner could do his or herself.
Under this particular scheme the scam artist contacts the homeowner who is in foreclosure, and explains to the homeowner that the loan modification process is a complicated and delicate process that only he or his company can navigate.
These companies often charge up front fees or monthly fees to call the lender on the homeowner's behalf. However, what these scam artists are doing is nothing more than the homeowner can do themselves; these scam artists possesses no unique skill set or license that qualifies them in dealing with home loans.
Further, they do not have any special connection or expertise that enables them to get a better loan modification than the homeowner could get for them self. The scam is designed to make it look as though they are doing everything they can to modify the homeowners loan or prevent a foreclosure, when in reality they may be making token phone calls to the lender or doing nothing at all.
The goal of the scam artist is to extend the process as long as possible in order to accumulate monthly fees from the victim.
In another form of fraud, scam artists will induce the homeowner to deed the home to the scam artist while promising to prevent foreclosure. This is often accomplished by a quitclaim deed executed by the homeowner, which is seldom recorded in the public records.
Often, the scam artist will promise to negotiate with the mortgage company or to pay the mortgage in order to assist the homeowner. The scam artist will then either rent the property to a tenant, or on many occasions the scam artist will rent to the homeowners themselves.
In some variations of this scam, the homeowner may be led to believe that the homeowner can "buy back" the home once the foreclosure problems are solved. The result is usually that the scam artist continues to collect rent while the mortgage remains unpaid. The scam artist almost never actually negotiates with the mortgage company. In the end, the homeowner winds up losing the home and having a judgment entered against the homeowner.
One way for homeowners to protect themselves is to hire an attorney licensed with the Florida Bar Association. The Florida Bar imposes strict ethical requirements on all attorneys licensed in the State of Florida. Florida Attorneys have undergone extensive background checks and evaluation prior to being admitted to the Florida Bar.
Moreover, attorneys are not often willing to sacrifice their careers for a quick buck.
That being said, homeowners should always check the credentials and experience of prospective attorneys, as well as the attorney's community ties and business background before hiring an attorney. Finding an established attorney with a regular place of business is important. Finally, attorneys should always be willing to provide written credentials to any prospective client.
The foreclosure rescue fraud problem has reached epic proportions in the Orlando area, and is only increasing. Numerous companies are under investigation by the office of the Attorney General. For further information concerning foreclosure rescue fraud issues, readers may visit the Office of the Attorney General at www.myfloridalegal.com/mortgagefraud.
The TK Law Firm has extensive experience with defending foreclosure and assists homeowners in resolving mortgage foreclosure problems without the need to file bankruptcy. For additional information concerning foreclosure defense, contact the TK Law Firm Call 407.834.4847