New Report Shows Attorneys at the Root of Foreclosure Rescue Schemes

Allison Tussey —  June 11, 2014 — Leave a comment

The Loan Modification Scam Prevention Network and the Lawyers’ Committee for Civil Rights Under Law issued a report finding that attorney involvement in foreclosure rescue and loan modification scams to be growing…

According to the Report – Executive Summary, scam operations have taken several different forms over the past years, all designed to fraudulently extract money from distressed homeowners.

For example, in West Palm Beach, Florida, foreclosure rescue “consultants” held seminars to teach people how to make money off of distressed homeowners. In Northern Virginia, Spanish-language radio stations ran advertisements for “guaranteed” foreclosure rescue.

In Southern California, homeowners turned to the real estate agents who helped them buy their houses only to have those agents lead them straight to illegitimate brokers who claimed special access to the banks but instead took the money and ran. In Atlanta, Georgia, attorneys at a fraud conference reported they were solicited randomly by phone to sign up as “partners” or “affiliates” of foreclosure rescue operations.

In Long Island, legitimate New York housing counselors were aware that homeowners were unknowingly giving fraudsters powers of attorney to talk to banks on their behalf, thereby blocking the legitimate counselors from intervening and providing real assistance.

In Fort Myers, Florida, a woman gasped and groaned, ‘Mom, no…’ as her elderly mother haltingly asked whether she could expect any assistance from the California-based company she had been paying every month all winter.

Finally, in Tucson, Arizona, a middle-aged couple on the brink of divorce, but too sickly and too broke to move forward with the proceedings, united in their fight to save their major marital asset, their home, but were fleeced out of their mortgage payments by a foreclosure rescue scammer.

According to the Report, recent data shows that attorney involvement in scams is growing and appears to be an effective means of ensnaring victims… Attorneys, or someone pretending to be affiliated with an attorney, attempt to ease skepticism by involving a “non-profit.” Anyone involved in preventing foreclosure or foreclosure rescue fraud knows the best resource for homeowners is a FREE, HUD – approved housing counseling agency. The problem is that not every organization who claims to fit that description actually does.

Loan Modification Scam Prevention Network initiative is supported by Bank of America, Citibank, Fannie Mae, Freddie Mac, J.P. Morgan Chase, Open Society Foundations, and the U.S. Department of Housing and Urban Development.

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Allison Tussey

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