a buyer's market. Or maybe a seller's
State Officials Warn Homeowners of ‘Foreclosure Rescue’ Schemes
By J. Gelband, 6-26-07
A crafty crook should plan his schemes to coincide with times of public pseudo hysteria for maximum gains.
Fortunately for Idahoans, Attorney General Lawrence Wasden is onto the crafty crooks now targeting the tenuous home mortgage market with fraudulent “foreclosure rescue” scams.
Wasden and Department of Finance Director Gavin Gee are encouraging anyone who may be facing foreclosure to become informed about their options before falling victim to one of the latest scams that could snatch from a homeowner their property and equity.
The Attorney General’s Office and the Department of Finance have recently received complaints from consumers who unsuccessfully used these rescue companies to try to avoid foreclosure.
“The possibility of losing one’s home to foreclosure is, to say the least, frightening for anyone,” Wasden said. “Foreclosure rescue scam operators take advantage of this fear to their own profit and the consumer’s loss. Many of these schemes are designed to fail so that consumers lose their homes to the so-called rescue company.”
These rescue scams promise to save a home from foreclosure for a fee or by securing the property’s title to the rescue company. But the consumer loses the home and the equity in the home and the rescue company gets it.
These are some of the red flags the AG’s Office notes:
You are asked to sign a contract agreeing to turn over ownership of your home to the foreclosure rescue operator.
The contract states that you may lease your home for a specific amount of time, with the option to buy back your home by a certain date.
The foreclosure rescue operator requires you to pay a fee for assistance in rescuing you from foreclosure. The fee may be substantial and may even equal all of the equity in the home.
At the end of the contract date, the foreclosure rescue operator promises to return home ownership back to you.
Among the problems with these rescues are that it might cost more money to rent than what’s affordable and that if a homeowner defaults or can’t make a full payment, they get evicted.
“Approach any mortgage foreclosure resource service with caution,” Wasden said. “It is very important for Idahoans to know that, absent fraud or deceptive practices, Idaho law will not protect you from giving up your equity and agreeing to pay a substantial amount for rent and to repurchase your home at a later date.”
Instead of being taken by the crooks, Gee encourages people facing foreclosure to seek the advice of a qualified professional who does not have a personal interest in the decision and to talk to the lender as soon as there is a problem with payments.
“Letting time pass with the mortgage unpaid will only make the consumer’s problems worse,” Gee said. “Licensed debt and credit counselors, legal assistance, or certain government agencies can offer information and options about foreclosure while you are working with your lender.”
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