With all the news about the “mortgage crisis,” scam artists are taking advantage of the opportunity to cheat people who are already in a difficult financial situation.
The Office of the Comptroller of the Currency issued an advisory recently that provides advice to help prevent borrowers from becoming victims of foreclosure rescue scams.
“Foreclosure rescue con artists take advantage of vulnerable people who have fallen behind on their mortgages and may be facing foreclosure,” said Comptroller of the Currency John Dugan. “People facing difficulties with their mortgages should contact their lender—or a legitimate financial counselor—sooner rather than later. Lenders are often in the best position to help by identifying options or modifying the loan, especially if the borrower is current on the loan or not seriously late on payments.”
Some specific ploys include:
• Lease-back or repurchase offers. The scheme often involves signing the deed to your home over to the con artist. He or she may promise to sell your home back to you, but this may be very difficult, if not impossible, under the terms of the contract.
• Refinance fraud. Watch out for people posing as mortgage brokers or lenders and offering to refinance the loan into affordable payments. Con artists may end up tricking the borrower into signing over the ownership of the house.
• Bankruptcy schemes. Several scams abuse the bankruptcy laws. In one version, the owner is to give a partial interest in the home to other people, who then file bankruptcy. While the court may issue a stay order each time to stop foreclosure temporarily, the owner still is liable for the loan payments.
The bottom line: beware of anyone you don’t know who claims to have the answer to your mortgage troubles. It’s best to take action before the problem gets bigger, but only with your lender or a financial counselor whose legitimacy you can verify.
If you’re experiencing difficulty with your mortgage—or know someone who is—you’ll find valuable information in the OCC consumer advisory at http://www.occ.treas.gov/ftp/ADVISORY/2008-1.html.
