This page is to alert you of known scams that we are seeing and hearing about in the market place. If you have a known alert or scam you feel we should include on this page please e-mail us at firstname.lastname@example.org.
Below are common scams that have been brought to our attention and are common in our current market
Produce a Note is a myth that is commonly used to dupe homeowners out of money. This legal theory doesn't apply to homes of trustee sale such as Arizona. It only applies to judicial foreclosure states and is fairly ineffective at best as a delay tactic.
Sue your lender for giving you a home you should have never qualified for. They claim the borrower was damaged by the lender issuing the loan based on false of misleading information provided by the borrower in a "stated" income type of loan. This is a very dangerous scam and the plaintiff often ends up as a defendant defending themselves in fraud lawsuits as the tables are turned on the homeowner. Homeowners can be legally liable if they signed misleading documents.
Lease Back scams have appeared in our market and are often disguised as non-profit and/or investors pools that want to help homeowners stay in their home and re-purchase their property for a set amount of money later. They are convinced to quit claim the property to the lease back company or controlled trust under the promise this will stop the lender from foreclosing. This will not stop the foreclosure and lease back terms are usually impossible to meet later therefore placing the homeowner back into a bad situation.
Forensic Mortgage Loan Audit Scams: A New Twist on Foreclosure Rescue Fraud
Fraudulent foreclosure “rescue” professionals use half-truths and outright lies to sell services that promise relief to homeowners in distress. According to the Federal Trade Commission (FTC), the nation’s consumer protection agency, the latest foreclosure rescue scam to exploit financially strapped homeowners pitches forensic mortgage loan audits.
In exchange for an upfront fee of several hundred dollars, so-called forensic loan auditors, mortgage loan auditors, or foreclosure prevention auditors backed by forensic attorneys offer to review your mortgage loan documents to determine whether your lender complied with state and federal mortgage lending laws. The “auditors” say you can use the audit report to avoid foreclosure, accelerate the loan modification process, reduce your loan principal, or even cancel your loan.
Nothing could be further from the truth. According to the FTC and its law enforcement partners:
- there is no evidence that forensic loan audits will help you get a loan modification or any other foreclosure relief, even if they’re conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer.
- some federal laws allow you to sue your lender based on errors in your loan documents. But even if you sue and win, your lender is not required to modify your loan simply to make your payments more affordable.
- if you cancel your loan, you will lose your home and you will have to return the money you borrowed to your lender.
If you are in default on your mortgage or facing foreclosure, you may be targeted by a foreclosure rescue scam. The FTC wants you to know how to recognize the telltale signs and report them. If you are faced with foreclosure, the FTC says legitimate options are available to help you save your home.
Spotting a Scam
If you’re looking for foreclosure prevention help, avoid any business that:
- guarantees to stop the foreclosure process – no matter what your circumstances are
- instructs you not to contact your lender, lawyer or credit or housing counselor
- collects a fee before providing any services accepts payment only by cashier’s check or wire transfer
- encourages you to lease your home so you can buy it back over time
- recommends that you make your mortgage payments directly to it, rather than your lender
- urges you to transfer your property deed or title to it
- offers to buy your house for cash at a fixed price that is inappropriate for the housing market
- pressures you to sign papers you haven’t had a chance to read thoroughly or that you don’t understand.
Redd the entire report: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt177.shtm