Foreclosure Scams

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Foreclosure scams mainly target homeowners who are on the verge of losing their homes. Others target lenders, and some scam schemes may even be unintentionally triggered by banks overburdened with large numbers of bad loans.

In May 2009, the Fraud Enforcement and Recovery Act of 2009, or FERA, was signed into law. The law sets out a number of steps to strengthen the criminal enforcement of federal fraud laws, especially against financial institutions, mortgage fraud, securities fraud, or commodity fraud.

 

Mortgage Relief Scams

Mortgage relief scams, or predatory mortgage lending, happens when an individual, company, or service provider misrepresents or misleads a consumer with false promises or beliefs that their mortgage can be kept or altered.

Fraud happens when an individual or company offers to help you renegotiate your mortgage. The most common types of Mortgage Fraud and how to spot them: 

  1. Loan modification. Fraudsters can often promise that they will save your home from being foreclosed. They offer loans in the form of reduced principal and guarantee that you are a qualified candidate.
  2. A loan modification is an negotiated change in a borrower's loan that allows the loan to be reinstated with a payment that the borrower can afford.

     

    Federal consumer protection laws provide an exemption that allows attorneys to charge upfront fees for helping homeowners get loan modifications. Credit modification scammers often try to circumvent these laws by charging upfront fees. They use attorneys as a face in their operations to collect the down payment and then never deliver the promised services.

  3. The scammers claim to have a staff of attorneys working for them, when in reality it is not the true.
  4. Foreclosure scammers may ask you to pay in advance with cash, check or credit card. Keep in mind that only a licensed attorney can collect a upfront or advanced fee.
  5. Scammers may call and introduce themselves as service providers associated with approved government agencies such as the Home Affordable Modification Program (HAMP), the Making Home Affordable (MHA) program, or the Home Affordable Refinance Program (HARP), when in fact they are not. They may ask you to pay high upfront fees in order to qualify for loans from these programs. Remember that the borrower does not have to pay to receive benefits from government services.
  6. A lease back scheme. The service provider requires a borrower to surrender title or deed to their home as part of the negotiation process to purchase house. As part of the deal, the scammers tell the homeowner that they can lease back the house from them until they are able to purchase it back in a few years. The allotted time will supposedly allow you to repair the loan from the harm caused by the losing the home. In most cases, the house is falsely purchased, with no intention of the homeowner ever purchasing the house back. The house is often foreclosed upon a few months later.

Popular foreclosure rescue scams: 

  1. Charging fees for easy phone calls or paperwork, which the homeowner can easily and quickly do, but in the end, none of these operations results in saving the house. This predatory scam gives homeowners a false sense of hope and prevents them from seeking qualified help.
  2. A scam where the homeowner signs over the title with the belief that he will be able to stay in the house as a renter and eventually buy it back over time. The terms of these scams are so onerous that a buy-bck may not be possible, the homeowner loses possession, and the so-called "rescuer" walks away with most or all of the equity.
  3. A scam where homeowners think that they are signing documents to bring the mortgage current but instead are actually surrendering their property. They usually do not know they've been scammed until they're evicted.

In Fiscal Year 2021, there were 58 mortgage fraud felons convicted in the federal system. Mortgage fraud offenders down 69.9% since fiscal year 2017

 

Signs that you may be the victim of a foreclosure scam: 

  1. You are asked to pay large fees upfront and only accept cashier's checks and bank transfers.
  2. Somebody discourages you from talking to your creditor and attorney.
  3. They advise not to react and to appear when summoned to court. Please note that the process will continue without you and you will be one step closer to foreclosure.
  4. They pressure you to sign a house deed or other documents without consulting an attorney. You should never sign anything that you have not read or understood.
  5. They insist that you rent out your house and buy it back within a certain period of time.

If after reading this article you have doubts about the fact that you have become a victim of scam, then immediately CONSULT YOUR ATTORNEY.

 

Do not be shy. Call and discuss with a lawyer the issue that concerns you and together find a way out of this situation.

 

Sharova Law Firm: “We will help you save your home and we know how important it is for you to be heard“

 

Sharova Law Firm in New York will work with you to resolve your issue in a professional and timely manner. Make sure you are not a victim of foreclosure or mortgage scams.

We will do our best to find a solution to your issue, no matter how complex your case may be.

Contact number: 212-321-0741

 

 

New York, NY Civil Litigation Lawyers

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