Foreclosure Rescue Scams Netting More Vulnerable Homeowners

Posted on October 28, 2009
Filed Under Repo Homes | Leave a Comment

Foreclosure rescue scams are netting in more vulnerable homeowners. In these dark days this is one line of business that is flourishing. The scammers hardly have to make any initial investment. They do not need expert training either, having learnt their skills during the time of the housing boom when they lured in gullible borrowers to contract sub-prime mortgages.

Pundits opine that these scammers will continue to flourish so long as the housing crisis continues. It is the worst crisis the country is passing through since the time of the Great Depression in the 30’s. Keith Slotter of FBI in San Diego said, “Rescue scams are the real growth industry. All you need to target people is a computer and know-how to set up a website and you’re in business. These groups can set up quickly, target people across multiple states, shut down and move on before they’re detected.”

Operating in mortgage fraud was fairly easy during the time of the housing boom. Many pundits are of the opinion that it was the prominent role fraudsters played during the time of the boom that the crisis came to be born. It forced the country into recession towards the end of 2007 and erased property value worth trillions in dollars.

Now rescue scams are gnawing into whatever is left in the pockets of the homeowners. Time is being wasted that could have been better utilized by the borrowers in talking with lenders and or the right counseling groups. This delay is causing foreclosures that could otherwise have been avoided. The net result is a prolongation of the recession thanks largely to these foreclosure scams.

Melinda Opperman of Springboard, a housing counseling group said, “There are a lot more people we could help if it weren’t for rescue scams. This could end up slowing down any potential recovery.”

One of the easy preys was a couple – Salvador and Blanca Jimenez of Los Angeles. They purchased their first house paying $430,000 in 2005 taking an ARM loan. But when their monthly mortgage paying spiked by $800 to touch $2,691 in the early part of 2008 they could no longer afford it. They started lagging behind. At this point they were contacted by mail by a company named Direct Lender. The firm offered to reduce the monthly payment for a fee of $3,995. The couple went to their smart showy office and when they spoke in Spanish the couple felt comfortable and trusted them. Taking their advice the couple stopped paying the mortgage money to the lender and instead began to pay Direct Lender. Soon they got a notice from the bank. The couple explained the situation but the bank said they have never authorized any third party to collect money. The couple has now turned to the law for help.

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