By JLP | November 28, 2006
It never ceases to amaze me at the lengths that people will go to in order to make a buck. One of the latest scams, called mortgage fraud, involves companies that disguise themselves as “helpers” to homeowners who are struggling to make payments on their homes and are facing foreclosure. Lingling Wei states in this article ($) in last weekend’s Wall Street Journal:
The problem centers on foreclosure-rescue companies, which target homeowners behind on their mortgage payments through newspaper ads or fliers claiming services such as “fast cash,” “equity funding” and “no credit check.” According to some recent cases filed by consumers and regulators, the companies mislead borrowers into believing they can save their homes from foreclosure in exchange for a transfer of the title for a year or two. The companies promise borrowers they can stay in their homes by paying rent for that period, giving them time to catch up financially until they can buy back their property. Often unknown to the borrowers, however, the companies may have sold their homes to a third party, stripping out the home equity and leaving the borrowers on the verge of eviction.
I know we have all heard this line MILLIONS of times, but I feel like I need to say it again:
The real shame is that most of these buyers were probably duped when they bought the house in the first place, using risky mortgages in order to “afford” the mortgage payment. It’s a shame but that’s the way the world works.