Foreclosure Scams

A mortgage is foreclosed or closed ahead of time when the borrower fails to make the monthly payments. Foreclosures consist of following steps – delinquency notice, notification of foreclosure followed by auction notice, sale and dispossession. The lender takes back his dues; so too does the tax authorities. If anything is left over the borrower takes it to face another tomorrow. The last stage consists of taking over the house and eviction of the previous owners.

The whole thing is agonizing and painful not for investors but those who lit home fires in their houses. The foreclosure kicks off not just court proceedings but also turmoil in the hearts of the people who are going to be mercilessly evicted. In most cases there is little or nothing left over to start life anew. In this condition the foreclosure victim becomes easy prey to jackals and vultures – those who pick the bones of what has been left over by the predatory lenders. They make a living out of rotting flesh – they are the scammers. Desperate for any sort of help the victims turn to them only to realize that they have jumped from the fire to the frying pan.

The perpetrators of the foreclosure scams first find out the details of affected from published records. Then they take the personal approach and repeatedly knock on the victims via mail or over the phone weeping crocodile tears. Scams mainly fall into three categories.

There is the Phantom-help wherein the scammer charges heavy fees for rendering services regarding negotiating with the lender. The borrower can easily do it himself but because he is no state of mind to do so advantage is taken. The fees are said to be refundable but are never really so. Nothing is done except that more precious time is lost – time that could have been utilized to salvage matters.

In the Bailout strategy the house owners is tricked into signing over the title deed on the good faith that he will be allowed to live on in the house as a tenant until the time is convenient for him to buy it back. The terms are tricky which the traumatized borrower has little patience to read. The net result is that within few months he realizes that the rent is higher than the previous mortgage dues and that the title has already been handed over.

The third strategy is bait-and-switch. The borrower thinks he is signing documents to make the mortgage current but in reality he is surrendering his title and rights.

Until eviction takes place the trusting victims do not realize they have been taken for a ride; by then it is too late. More often than not the scammers are not unknown faces. The victims are old and ailing or uneducated. The terms are couched in complexity. Affinity marketing is used where blacks cheat blacks and the like.

The authorities are sitting up to the menace and taking active steps in conjunction with non-profitable organizations.

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