Many more variations of bankruptcy foreclosure fraud are surfacing around the country. Probably the most widespread involves the use of foreclosure notices to identify individuals facing the loss of their homes. The scam perpetrator contacts the home owner, advertising "mortgage assistance" or "foreclosure counseling" and promising to work out the home owner's problems with the mortgagee or to obtain refinancing for an up-front fee typically ranging from $250 to $850. The perpetrator may direct the home owner to "fill out some forms," including a blank bankruptcy petition, or may collect the information needed to complete a petition later. The perpetrator subsequently files a bankruptcy petition in the home owner's name, after filling in the bankruptcy papers signed by the home owner or forging the home owner's signature. The bankruptcy petition invokes the automatic stay, the imminent foreclosure is postponed, and the home owner stops receiving collection calls and letters.

  In most cases, the perpetrator does not tell the home owner about the bankruptcy petition, instead convincing the home owner that foreclosure activity has ceased because mortgage problems have been worked out. The perpetrator may tell the home owner that he or she might receive a notice from the court, which should be ignored. The home owner may even be told that the perpetrator has gone to court on the home owner's behalf. No one appears at the Section 341 meeting, the case is dismissed, the foreclosure goes forward, and the home is lost.

  Permutations of this scam include the perpetrator's collecting monthly mortgage payments from the homeowner, falsely stating that they will be forwarded to the mortgagee. In these cases, each defrauded homeowner pays not only the up-front fee for "services," but also hundreds or thousands of dollars in mortgage payments.

  In another increasingly common alternative, the scam perpetrator convinces the home owner to quit-claim the residence to the perpetrator or to sell the residence for a nominal fee such as $1. The home owner agrees to transfer title because he or she has little or no equity in the property. The perpetrator charges the home owner "rent" or a "consultant's fee" or "management fee" to stay in the residence while the mortgage problems are worked out, after which the home owner will be able to "apply for repurchase" of the property or share the profits if the perpetrator sells the property.

  But it costs money for the perpetrators to file all of these bankruptcy cases. To avoid bankruptcy filing fees, some perpetrators transfer an interest of the home owner's quit-claimed property into the name of an existing bankruptcy debtor--perhaps a Chapter 11 business debtor across the country--in a variation of the fractional interest scam. Typically, the debtor learns that a property interest has been transferred into its bankruptcy estate when it is contacted by counsel for the property owner's secured creditor, who has learned it cannot foreclose because the property is owned by a bankruptcy debtor.

The Foreclosure Fraud Alert Website http://www.foreclosurefraudalert.com/

The Foreclosure Fraud Alert Blog  http://www.foreclosurefraudalert.com/fraudblog

<< Previous    1  [2]  3  4  5    Next >>