Warnings are being repeatedly given about foreclosure rescue scams

August 7th, 2009 | Tags: Foreclosure

foreclosure-scams

Enforcement officials are repeatedly giving out warnings about foreclosure rescue scams. They are joining hands at the state and federal level to prevent victims from losing thousands to scammers in their vain attempts to save their houses.

The lead in the programme named Operation Loan Lies is being given by The Federal Trade Commission. It comprises 25 agencies aiming to close down entities that are fraudulently selling themselves as foreclosure rescue services. These firms do very little to help the loan workouts said the officials of FTC.

The FTC has booked 14 cases since 2009 April. Twenty three attorney generals of the state as well as other agencies taking part in the operation have swung into action against such firms numbering 178.

Despite this the work before the officials is tough – to say the least, in trying to put a halt to these nefarious activities. There is a surfeit of these charlatans – sharks in the sea of foreclosed victims.

These con artists are akin to vultures that first identify the victims before swooping down on them. They boldly advertise themselves over the radio and television channels with tall promises. They ask for fees that could be anything from $1,000 to over $5,000.

The con artists are taking advantage of the situation that despite measures launched by the federal government the borrowers in most cases are not being to avail of them. The pace of response from the lenders is not matching the demand for speedy action.

In the Making Home Affordable scheme the Obama government has woven in various measures. It is trying to reach out to millions threatened from foreclosure. The programme has been even expanded to help those who are 125% underwater on their loans. Hitherto its condition was more stringent and reached out to less number of borrowers. But currently if for example the property value is $200,000 and the loan is $250,000 or less than that on first lien mortgages the borrower is eligible for help through HARP.
The government first launched this programme last February. At that time the Treasury calculations were tat 7 million to 9 million borrowers would benefit from it. Recently HUD said that over 200,000 borrowers have accepted the offers for going through the trial modification period. Thousands of refinances and modifications are being processed. But the irony is that while this is going on more new foreclosures are rushing in.

Via