With the recent controversy and media scrutiny surrounding several banks that have confessed to submitting thousands of falsely sworn documents to courts as part of their efforts to foreclose on people’s homes, it’s no surprise that scam artists are trying to capitalize on the situation, marketing their services to delinquent borrowers. Homeowners should know that even though these documents amount to committing fraud upon the court, this likely will not save their homes. The homeowner still owes money, and eventually the paperwork will get sorted out.
A scam that is already gaining popularity amongst delinquent borrowers is the “forensic mortgage loan audit scam.” In this scam, auditors and the attorneys who back them demand at least several hundred dollars up front, and then comb through the mortgage documents looking for any violations of state or federal fair lending law. If any are found, these individuals say, the homeowner can sue and – and here’s where the fraud kicks in – through the suit, cancel the foreclosure, speed the loan modification, reduce the loan principal or even cancel the loan.
The worst foreclosure scams are those in which the homeowner loses their house to the scammer, becoming a tenant in their own home. This is referred to as the “bailout,” “equity stripping,” or “rent to own.” Two other common types are “phantom help” and “bait and switch” scams. “Phantom help” promises help that never comes. “Bait and switch” involves telling people the documents they’re signing say one thing, when they really say another.
The best advice I can give is to carefully read what you are signing, particularly what’s noted in the fine print, and speak to an expert in the field if you are facing foreclosure. If you are a homeowner in trouble, particularly if you live in one of the high foreclosure states like Florida, you will be approached by these scammers. In South Florida within a few short days of a foreclosure filing, it is typical for a homeowner to receive 20 to 40 solicitation letters, of which 10-15 will be from scammers. Additionally, the homeowner will receive a dozen or more phone calls from scammers offering these fraudulent services, even visits to their front door! The Department of Housing and Urban Development has a prescreened list of agencies that can help, and unlike scammers, they will not ask for a cashier’s check or a wire transfer.
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Foreclosure defense attorney, Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on this topic please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia, P.A. website at www.miamibankruptcy.com.