"Tidal Wave" of Foreclosure-Related Scams

Share |
(Sacramento, CA)
Tuesday, March 24, 2009

Chances are, you’ve seen some variation of the scam yourself.   A letter in the mail offering to help you reduce your property taxes or modify your loan for an up-front fee.  Trouble is, once you pay up – there’s no help.  The company seems to have disappeared – and you’re out thousands of dollars:

 “This is a scam that proves once again that you can steal more with a pen or a computer than you can with a gun.”


Tom Papageorge heads up the Consumer Protection Division at the Los Angeles District Attorney’s Office.  He says scammers search public records to find people headed into foreclosure – then target them:


 “It’s especially sad that when we’re desperate, we take good common sense and we throw it out the window.”
According to the California Department of Real Estate, there are currently 500 open cases resulting from consumer complaints about mortgage-related fraud.  Just last July there were less than ten.
Maeve  Elise Brown is with Housing and Economic Rights Advocates -- a non-profit law office based in Oakland. 

“you can’t tell the good guys from the bad guys.”

Brown says even some licensed brokers and attorneys aren’t operating in good faith. 

“The reality is that nobody can guarantee that they’re going to be able to get your loan modified, but promises are what people are being offered and of course they’re desperate.”

She’s seen people lose thousands of dollars to scammers – and typically that money is not recovered.  So - How to avoid the trap? Experts say you don’t have to pay anyone to help you modify a home loan; you can work directly with the lender.  If you need assistance, they recommend going to a counseling service certified by the Department of Housing and Urban Development.