It’s estimated that nearly half the foreclosure “help” offers out there are scams! What can you do to avoid all these scams, but still find the help you need to save your home? Below you’ll find two popular mortgage scams and steps you can take to make sure these scammers don’t steal your home and life savings.
Maryland has been know as the capital of foreclosure fraud for several years now and has taken steps to reduce fraud by imposing stricter laws for foreclosure help companies, but not before one person stole an estimate $60 Million! Joy Jackson, the owner of the foreclosure rescue company Metropolitan Money Store was charged with fraud and is under federal investigation. Along with millions of dollars of equity, she was personally responsible for stealing over 200 homes from foreclosure victims. She is still at large, and so far, no assets have been returned to the victims.
Her method of scamming was to trick homeowners into signing over their house to a third party, who would, in turn, take out a second mortgage for a all the equity. She would end up walking away with most of the money from the second mortgage and then allow the original lender to continue the foreclosure process.
Another big time scammer is Bruce Wagner of the company Bold Funding. His scam was to collect thousands of dollars from the victims before they eventually lost their home to foreclosure. Bruce was also charged with a crime, but never punished. It was estimated that he stole over $1 Million from homeowners before leaving the state of IL to avoid prosecution.
His scam was to tell foreclosure victims that they qualified for a 3.5% mortgage, guaranteed. They didn’t need to pull credit, verify jobs, or check income; you only needed to send a money order for $2000 and you were automatically approved! The Bold Funding Scam was brought down when the company began to grow and two new employees reported the scam to the Attorney General.
There are three simple step you can take to avoid scams similar to the scams above:
Avoid foreclosure companies who sound too good to be true. In both scams above, the companies were offering services that were too good to be true. Saving your home doesn’t have to be hard, but don’t expect someone to give you a 3.5% loan, just because you pay a $2000 application fee.
Do not send money to a company, unless it goes into a verified escrow account, or until the claimed services are completed. Never send money to a PO Box or virtual office. Always verify the address of the company you are working with. Meet them in person if possible, or at least tell them you would like to meet in person and see if they’ll allow it.
Ask for all professional license numbers for the business and the people you speak with on the phone. All 50 states require a license for this type of business and many require a real estate or mortgage license. If you are working with an attorney, make sure they are allowed to practice law in your state. If a company will not provide you with this info, then do not do business with them.
Even though you might be desperate to save your home from foreclosure, don’t fall victim to the 1000’s of scams out there. Take your time to research companies and don’t make desperate decisions that will ultimately cause you to lose your home.