Facing Mortgage Foreclosure? Beware of Scams!

31 Aug Facing Mortgage Foreclosure? Beware of Scams!

When your mortgage company begins the foreclosure process, they file what is called a “lis pendens” (Latin for “lawsuit pending”)with the county clerk’s office. This puts the public on notice that they are intending to foreclose on your home. In many areas of the country, you will start receiving mail from a variety of people and businesses trying to “help you” to avoid the foreclosure. You should be wary of manyof these unsolicited offers of “help”, because many may be scams, aimed not at helping you out, but at helping themselves to you house and/or your money.

A scam that began in2004 was brought to light last week when theWestchester County, New YorkDistrict Attorney indicted eight people, including four attorneys. They had found outwhich homes were in the beginning stages of foreclosure,contacted the homeownersand proposed a “solution” that would keep them in their homes. The lawyers would then supervise the transfer of the properties, while assuring the homeownersthat when their financial situation improved, they could regainownership of their homes.

Instead, these alleged scammers took out extra mortgages on the properties and pocketed the money. When the banks actually foreclosed, the former homeowners were evicted.

All eight named in the indictment plead not guilty to charges of grand larceny, fraud and conspiracy and face from 5 to 15 years in prison.

The FBI reports than nationally mortgage fraud losses were up 83 percent in 2008. That numberhas only increasedin 2009.

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Peter Orville is a bankruptcy lawyer in Binghamton, located in the Southern Tier of New York. He is a member and New York co-chair of the National Association of Consumer Bankruptcy Attorneys.
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