In the last post we talked about scams that focus on getting
a homeowner to deed their property. Those really are less prevalent than
schemes that just take money, because let’s face it, it’s a lot easier to
convince someone to send you some money than it is to get them to deed their
home over.
So in this article I’ll focus on some of the more common
scams…those that just try to get you to pay money.
Phony Counselling or Phantom Help
In these, the scammer often represents that they have
expertise or a special relationship with your lender. They represent that upon
payment to them of a fee, they will negotiate a modification or partial forgiveness
of your loan. Of course they have no such relationship, and anything they
provide in terms of documents are what is readily available from government or
consumer websites at no cost. With these scams at best you are paying money for
something available at no cost to anyone. At worst you pay for a loan
modification that never materializes.
Equity Skimming
This is a variation of the phantom help scam, but more
damaging to you. Here you are not only told that the scammer is negotiating a
loan modification, but are persuaded to send monthly mortgage payments to the
scammer. You are assured that the money will be held in a special escrow account
as a sign of good faith while the mortgage is modified. Of course that never
happens. The scammer happily spends the money as soon as it is received. There
is no modification and because money that was intended to be applied to your
mortgage is paid to the scammer, your “hole” with the mortgage company gets
deeper and deeper.
Forensic or Securitization Audits
In these deals the scammer sells you on the idea (repeatedly
disproven) that if there is a flaw in the documents underlying the mortgage, or
in the transfer of the loan from one company to another, that you will be able
to stop foreclosure. It just “ain’t” so!! There has been a lot of press in the
past few years concerning failure to properly document loan transfers, “robo-signing”
missing documents, etc. These are all problems, but they are almost never
insurmountable problems. So yes, while it is true that a forensic or
securitization audit may turn up some issues, it is not realistic for you to
believe that because a document was not attached to a complaint, or an
assignment was improperly executed that your mortgage debt is going to somehow,
miraculously vanish. Yet you will be charged hundreds (sometimes thousands) of
dollars for an “audit” that is nothing more than a compilation of readily
available public records.
Bait and Switch
This scam is a little more blatant. The scammers tell you
that they are putting together a new loan for you…. One that will pay off your
existing mortgage thus eliminating the foreclosure. They conduct a “closing”
where you sign “loan” documents. In one version of this scam, buried in the “loan”
documents is a deed whereby you transfer title to your home. Following the “closing”
you are directed to make payments to the new “lender”. Of course your mortgage
is never paid off. The scammer collects your monthly payments, and may even
have the title to your home.
Conclusion.
Because of the large amounts involved, any issues related to
owning a home will always being the scammers out of the woodwork, like maggots.
While most people are honest, there is never any shortage of people willing to
lie, cheat, steal, or do whatever it takes to separate you from what is yours.
Because of the real estate crisis of the last decade, and because desperate
people will clutch at anything to save their homes, there is a tremendous
amount of misinformation and confusion…conditions in which scammers thrive.
Remember the old saying. If it seems too good to be true, it’s
not! If you owe money to a mortgage lender, with the rare, bizarre exception,
there simply is no “magic bullet” that will make the debt go away. Your
$250,000 loan is not going disappear because somebody didn’t sign something
correctly, or the current note holder can’t locate the original note.
Finally, remember that if you have any questions about any
foreclosure help, Be Your Own Lawyer will review them for you at no cost and
with no obligation.
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