Foreclosure Fraud

Foreclosure fraud has become a cottage industry.

How it works:

Homeowners who are having problems paying their mortgage are approached by someone who represents themselves as a mortgage consultant or a foreclosure service.  The scam artist offers to help these desperate homeowners and gets the home owner to transfer the title or deed to them.

They may use a sales pitch - such as "I can save your credit!" - while asking the homeowner to pay the mortgage payments directly to them. In some cases, the "rescuer" will also try to collect a fee before they assist the homeowner.  In the worst cases, the "rescuer" may also obtain a second loan on the property, take the proceeds and leave town, or rent out the home -- forcing the current distressed resident to be evicted. And while the ownership may have been transferred to the "rescuer," the homeowner still owes the monthly mortgage payments to the bank.

Equally as offensive are lenders who offer to "save" the troubled homeowner by refinancing their home. This often makes matters worse, since now the loan balances are higher, with closing costs and often additional cash for the homeowners being rolled into the new loan.

What to do:

Never sign anything without consulting an attorney, a legal aide, or a credit counselor.  Be careful when accepting a "refferal" from a rescuer, make sure and do your due diligence on anything prior to executing a signature.

If you believe you are facing foreclosure, the best thing you can do is contact your mortgage company. Banks and other lenders want you to stay in your home and will work with you to meet your current mortgage obligations. They may suggest renegotiating the terms of the mortgage or, at worst, suggest you sell your home. 

File a complaint:

If you have been a victim of real estate fraud or suspect a person or company is engaged in real estate fraud, contact:

Federal Trade Commission (FTC)

File a complaint

Federal Bureau of Investigation (FBI)

Read about mortgage fraud
Locations of FBI's Field Offices
File a complaint

Mortgage Bankers Association (MBA)

State-by-state list of resources