New sleazy mortgage scam aimed at residents facing foreclosure
Filed under: Real Estate, Fraud, Recession
Sure, all mortgage scams are sleazy, but this one seems particularly evil.According to a story in a recent newsletter put out by Identity Theft 911, a company aimed at helping individuals and institutions from being victims of identity theft, one of the latest scams involves a "foreclosure expert" approaching a distressed homeowner and claiming that they can save the house. Their plan?
Pay the foreclosure expert $5,000, and they'll buy the house for a cheap price, and then the resident will pay the foreclosure expert a monthly rent. The resident gets to live in their home. The foreclosure expert gets to make some extra money. In a year or two, the resident gets the deed back from the foreclosure expert. Everyone's happy. Well, not so fast.
Real Estate Troubles
A woman walks past a billboard for the Philippine American Life and General Insurance Co (Philamlife), the local unit of American International Group (AIG), in Makati City, Metro Manila, October 6, 2008. AIG, crippled by losses related to bad mortgages, said it has received offers for its Philippine insurance businesses and announced plans to sell its Thai consumer finance units.REUTERS/Cheryl Ravelo (PHILIPPINES)
Reuters
Jose Cuisia, the chief executive of Philippine American Life and General Insurance Co (Philamlife), the local unit of American International Group (AIG), speaks with journalists after a news conference in Manila October 6, 2008. AIG, crippled by losses related to bad mortgages, said it has received offers for its Philippine insurance businesses and announced plans to sell its Thai consumer finance units. REUTERS/Romeo Ranoco (PHILIPPINES)
Reuters
Customers enter the main offices of the Philippine American Life and General Insurance Co(Philamlife), the local unit of American International Group (AIG), in Manila October 6, 2008. AIG, crippled by losses related to bad mortgages, said it has received offers for its Philippine insurance businesses and announced plans to sell its Thai consumer finance units. REUTERS/Romeo Ranoco (PHILIPPINES)
Reuters
Customers walk past the main offices of the Philippine American Life and General Insurance Co (Philamlife), the local unit of American International Group (AIG), in Manila October 6, 2008. AIG, crippled by losses related to bad mortgages, said it has received offers for its Philippine insurance businesses and announced plans to sell its Thai consumer finance units. REUTERS/Romeo Ranoco (PHILIPPINES)
Reuters
The Wells Fargo logo is displayed outside a home mortgage office in Springfield, Ill., Friday, Oct 3, 2008. A battle broke out for control of Wachovia Friday as Wells Fargo signed a $15.1 billion agreement to buy the Charlotte, N.C.-based bank. (AP Photo/Seth Perlman)
AP
The Wells Fargo logo is displayed outside a home mortgage office in Springfield, Ill., Friday, Oct 3, 2008. A battle broke out for control of Wachovia Friday as Wells Fargo signed a $15.1 billion agreement to buy the Charlotte, N.C.-based bank. (AP Photo/Seth Perlman)
AP
The Wells Fargo logo is displayed outside a home mortgage office in Springfield, Ill., Friday, Oct 3, 2008. A battle broke out for control of Wachovia Friday as Wells Fargo signed a $15.1 billion agreement to buy the Charlotte, N.C.-based bank. (AP Photo/Seth Perlman)
AP
The Wells Fargo logo is displayed outside a home mortgage office in Springfield, Ill., Friday, Oct 3, 2008. A battle broke out for control of Wachovia Friday as Wells Fargo signed a $15.1 billion agreement to buy the Charlotte, N.C.-based bank. (AP Photo/Seth Perlman)
AP
Mexican billionaire Carlos Slim speaks during an interview with foreign correspondents in Mexico City September 30, 2008. Private investors should take stakes in U.S. banks to save them from financial ruin, with the government buying failed mortgage debt only as a last resort, Slim said on Tuesday. REUTERS/Felipe Courzo (MEXICO)
Reuters
Mexican billionaire Carlos Slim speaks during an interview with foreign correspondents in Mexico City September 30, 2008. Private investors should take stakes in U.S. banks to save them from financial ruin, with the government buying failed mortgage debt only as a last resort, Slim said on Tuesday. REUTERS/Felipe Courzo (MEXICO)
Reuters
Todd Lackner, a San Diego mortgage fraud expert interviewed for the article and who has worked on at least 400 of these types of cases, says that this might all work except that, of course, it never does. Shortly after the homeowner pays the foreclosure expert a fee along the lines of $5,000 and signs over the deed to the house, the so-called savior will then use any excuse that they can to kick the former homeowner out of their home.
In some cases, according to Lackner, homeowner-turned-renters have been evicted for being 10 minutes late with their rent check. And then the foreclosure expert has a new house, and I'm assuming then that the evicted victim still owes the bank for whatever they haven't paid on their home.
It sounds outlandish, but these scams are everywhere. Fraudulent mortgage loans, in fact, went up 42% in the first three months of 2008 compared to the first three months in 2007. The "companies" usually have very honest and bland sounding names like Nationwide Lending Group and Foreclosure Prevention Services, which has to drive the reputable companies that are out there, crazy. So if you do have a house that is teetering on the foreclosure abyss, and you want help and wonder where to turn, try going to the Department of Housing and Urban Development's web site, which has a lot of good, solid resources, or just do what they'll you to do and call the Homeownership Preservation Foundation at 1-888-995-HOPE (4673).
And the best rule of thumb. If you're approached by a company or individual who claims that they can help you avoid foreclosure, and you have to pay them money instead of your mortgage company, don't. And if their services require you to pay them money while they negotiate with your mortgage banker--don't--because they won't--and meanwhile, your monthly mortgage will continue to go unpaid and be ignored. That's another common ploy of a lot of these scammers.
Geoff Williams is a freelance journalist and the author of C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America (Rodale).
Reader Comments (Page 1 of 3)
11-16-2008 @ 7:52AM
Dave said...
Nice try but the homeowner with a mortgage doesn't hold the deed. The mortgage company does. You been busted!
Reply
11-17-2008 @ 3:00PM
BJ said...
You don't need the actual deed. The skammer can draw up a deed of trust, this will transfer controlling rights to the holder. The mortgagee is still liable to the deed holder, this is the confusing part.
11-17-2008 @ 3:40PM
Claire said...
dave, you must be new. The owner holds the deed, not the mortgage company. The deed is recorded after the purchase. The Mortgage ties the property to the loan as the colateral. The fact is, if you deed your property to someone else while you have a mortgage loan, without the permission of the lender, the lender can call the mortgage note due. This is a scam that is being perpetrated more and more. Deeding your home to someone does not get you out of the requirement to repay your mortgage loan based upon your terms. It does however give the ownership of your home to someone else who can try to use it as colateral because it is now in their name as the owner of record. The bank does not receive the deed to the home unless they foreclose.
11-17-2008 @ 6:03PM
joncdodge said...
I always wondered what really happens if you dont pay your loans and credit cards.. I found out!
http://www.curiousread.com/2008/09/what-if-you-dont-pay-your-credit-card.html
Good luck!
11-17-2008 @ 7:20PM
Nikki said...
In Calif there are 2 deeds - the Trust Deed which secures the mortgage and the Grant Deed which the owner holds giving them title to the property. If you own your house free and clear, then the owner only has the Grant Deed.
The lady who chained herself to her house defaulted on 8 mortgages, some of which she only paid one or two payments. She mentions her refinance, but she was greedy and used the refi money as down payments for all the other houses. She got caught when the market deteriorated. That was not covered in this edited version of CNN but was covered on all the other local San Diego stations. She had not paid her mortgage on the home she chained herself to for almost 3 years.
It's hard for me to sympathize with someone who milks the system like her. There are REAL victims - but she is not one of them. She is a victim of her own greed.
11-16-2008 @ 8:08AM
Jenn said...
Clearly Dave is not in the mortgage business. The deed is in fact held by the homeowner. It's not like a car title. This is not a new scam, it has been going on for years and in most cases the homeowners lose their place to live.
Reply
11-16-2008 @ 11:53AM
ira said...
Never ever, ever, quit claim. If offered a deal like the one mentioned above, you can add the person or company's name to the deed, which means neither of you can do anything without the approval of the other. DUH! I discovered one of the best books you'll ever find about finance, "How to Become Filthy Rich on Your Current Income" at www.how-to-become-rich.com. If people read books like this one we would not have the current situation we do.
Reply
11-17-2008 @ 2:11PM
obamathevil1 said...
Just hold on Obama gonna resecue all you.......NOT
Reply
11-18-2008 @ 12:10AM
marie said...
U R an Idiot
11-17-2008 @ 2:20PM
pam said...
MY NAME IS PAMELA KAYE MAGEE AND I AM A SCAM ARTIST AND IDENTITY THIEF. I LIVE IN BOISE AND ATLANTA IDAHO AND I PULL SCAMS LIKE THIS ALL THE TIME. I WOULD LIKE TO BE PUT IN JAIL WON'T SOMEONE REPORT ME.
Reply
11-17-2008 @ 2:45PM
sherry said...
HEY PAM IF YOU ARE WHAT YOU SAY YOU ARE, WHY DON'T YOU TURN YOURSELF IN TO THE COPS. SCAM ARTISTS ARE THE LOWEST CREATURES ON THIS EARTH AND THOUGH I HAVE NEVER BEEN SCAMMED, I DON'T TRUST ANYONE I CAN'T WAIT FOR ALL OF YOU TO GET WHATS COMING TO YOU.
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11-17-2008 @ 2:48PM
Tess said...
This was an episode on Law & Order a few years ago. Someone watched the rerun, and decided to give it a try.
Reply
11-17-2008 @ 2:52PM
Owen said...
Folks, if it sounds too good to be true, it usually is.
Reply
11-17-2008 @ 2:57PM
Fran said...
Scam artists like these scum bags are the worst. Open season should be declared on them to see they get what they deserve. I know if it were me they scammed, They would not be around long enough to spend their ill gotten gains.
Reply
11-18-2008 @ 12:22PM
sam said...
U need Jesus if you would take a life for materil goods. One can always regain material goods but once a life is suffed out it is over for ever
11-17-2008 @ 3:06PM
Kent said...
If you still want to utilize this plan, have the mortgage expert agree to join you to ferret out the details with your bank. He'll probably decline or say he's too busy. He'll fade out of sight. Recently, a nationally known bank rep came by with flyers promoting this very same program. I should have kept the flyer to see if it was legit. If it is, even the banks are involved in this kind of scheme but assume legally; but the principle is the same.
Reply
11-17-2008 @ 3:08PM
jonas said...
I've had my idenity stolen once, and somebody opened a credit card with my ss no, and charged $32,000.00, (yes thousand
dollars) on it at a sporting goods store in baltimore md, It took me about 6 months to get it straightened out, and mainly because I have never had a master card in my name, the cc co offered to settle with me if I payed them $0.10 on the dollar, or 3,200.00, I told them I would not pay $0.32 on a bill I didn't owe, and finally it just went away.
Reply
11-17-2008 @ 3:20PM
FB said...
If you believe #6 (Pam) I think you just got scammed.
WORRIED ABOUT TRAILER THEFT?? You need:
Http://www.carrythebigstick.com
Reply
11-17-2008 @ 3:29PM
Alexia said...
Scam artists, landlords that are taking tenants money while their homes are in forclosure and short sales and then wanting a bail out from the government....They get money from each side of the spectrum. Why not put a stop to their illegal moves...
Help out the tenants from being homeless and out of money.
Reply
11-17-2008 @ 3:28PM
Rick said...
Obama will pay off my mogage and put gas in my old Caar', aint dat what we wuz promissedd. i anit gonnna pays no taxs ether. its goona be good times fo de fo yea's, cuz dem boys and ho's in cogreess goona be gud democragsts, and spred da welth.
Reply