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October 5, 2008 - by MSNBC
Millions Facing Foreclosure Fraud
Angela Carter's family has lived for 46 years in the same small
two-story home in Chicago, perhaps a 15-minute ride from Barack
Obama's adopted Hyde Park neighborhood. But today a piece of
paper says someone else owns the property, and a judge will
soon decide if Carter and her mom get to stay in her home.
The reason Carter, 55, is facing eviction, she says, is that
she fell for a high-stakes scam that’s sweeping the nation,
preying on the 1 in 11 consumers who are either behind on their
mortgage payments or already in foreclosure.
Interviews with legal aid offices and law enforcement officials
around the nation indicate the problem of so-called
“foreclosure rescue scams” has spread like wildfire, neatly
paralleling the downturn in the mortgage market.
The problem is so bad that in Portland, Ore., local police now
automatically send a letter to homeowners who enter foreclosure
warning them that they will be inundated with shady offers of
help. In one case in Maryland, a single firm is accused of
bilking hundreds of residents out of their homes and stealing
$60 million in equity. Similar large-scale scams are happening
elsewhere; in fact, foreclosure fraud is so common that it's
exacerbating the nationwide housing slump, adding to the ranks
of distressed homes that pull down the housing market in
general, according to some experts.
There are many variations on the scams, but they all boil down
to two types. There’s a simple fee-based racket, in which the
criminal offers to help the homeowner stave off foreclosure,
collects an up-front fee and then disappears. But the more
lucrative scam involves seducing homeowners into complicated
transactions that allow con artists to steal equity in the
house or walk away from the closing table after netting
thousands in phony payouts.
How serious is the problem? The proliferation of roadside signs
with entreaties like “We buy houses” and late night
infomercials promising easy real estate riches offers a
clue.
"There is a booming business in selling information on
foreclosures,” said Melissa Huelsman, a Seattle-based lawyer
who represents victims in predatory lending cases. “There are
whole companies that do that and little else. That gives you an
idea how big this is.”
Carter, who might lose her Chicago home, said she was hit by
the worst kind of rescue scam, with her suitor managing to
drain nearly $100,000 in equity from her home before she knew
what had happened.
Source: http://www.inlandnewstoday.com/story.php?s=3934
The Foreclosure
Fraud Alert Website http://www.foreclosurefraudalert.com/
The
Foreclosure Fraud Alert
Blog
http://www.foreclosurefraudalert.com/fraudblog
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