Mortgage Foreclosure Scams See Huge Spike: Report

If you're a struggling homeowner watch out! The chance that you'll get scammed is way up.

The number of reported mortgage foreclosure scams has shot up 60 percent so far in 2012, according to the nonprofit Homeownership Preservation Foundation. About 50 percent of the scams involve attorneys or others claiming to offer "specialized services."

The surge in schemes comes in the wake of recently launched federal programs that scammers have been able to exploit.

"Regretfully, every new government initiative spawns a slew of foreclosure avoidance scams, often from the same cast of characters doing business under various names to avoid easy detection and identification," Colleen Hernandez CEO of the organization said in a release that accompanied the findings.

In one recent example, New York Attorney General Eric Schneiderman has warned that scammers may exploit the recent national mortgage settlement to take advantage of homeowners. The scammers claim to be government officials involved in the settlement and try to pry personal financial information, Schneiderman said earlier this month.

In another example, a judge shut down a Santa Ana mortgage relief operation last month after the band of five companies and three websites raked in more than $1 million by allegedly taking advantage of hundreds of consumers, according to the Los Angeles Times. The operation allegedly used two scams: One that charged homeowners thousands of dollars to join a class-action lawsuit and another that for a price of at least several hundred dollars offered to do a home loan audit that would find lender violations at least 90 percent of the time.

With the threat of foreclosure constantly looming there are many potential victims available for these scammers. One in every 662 housing units received a foreclosure filing in March, according to RealtyTrac. That's an uptick from the month before indicating that there might be a surge in repossessed properties.

CORRECTION: An earlier version of this post misidentified Colleen Hernandez. She is the CEO of the Homeownership Preservation Foundation.

Comments

[spytheweb]

12:22 PM on 04/17/2012

America is weak on all kinds of enforcement. They are easy pickems.

[gangoflogic]

12:09 PM on 04/17/2012

I'm a struggling renter who can't buy a house because of all these games the feds are doing to keep the prices up, while the rich homeowners sit in their homes and not pay their mortgage and are given "feel sorry for" titles like struggling homeowners...

Why no love for renters? Do we get mods? Do we get to have a moratorium on evictions? Does it make me a better person if I buy a house and late on payments instead of rent?

This is sick...

[p mersault]

12:47 PM on 04/17/2012

You won by not playing. Your credit is intact and you at least have the prospect of owning a home in the future, unlike these people who have lost all their equity. That in itself should be enough. Just wait, you'll be able to pick something up at a great price in the next few years.

[GetRealSoon]

12:56 PM on 04/17/2012

So you have no idea what the financial crisis was about. Or its just ME, ME, ME, ME.

[gangoflogic]

11:37 PM on 04/20/2012

What is it about, please care to explain...

[stinkypoon]

01:03 AM on 05/02/2012

Me me me? I think the point is pretty valid, that this whole "they need" mental sickness has now spread to bad gambles. Imagine if we did this after the dot-com bubble, bailing out people whose investments fell by far more than home prices did. At least that was their own money. The mental sickness is cheering for bailouts for those who DIDN'T put a financial stake in their bets.

[Siebenstein]

06:51 AM on 04/17/2012

In one recent example, New York Attorney General Eric Schneiderman has warned that scammers may exploit the recent national mortgage settlement to take advantage of homeowners. The scammers claim to be government officials involved in the settlement and try to pry personal financial information, Schneiderman said earlier this month.

That's a no-brainer, since the AG's settlement is not doing anything for homeowners, so we know it must be a scam.

[SueZbell]

08:42 PM on 04/16/2012

We need to resist the temptation to keep bailing out people and entities--most real estate has been way overvalued--increasingly out of reach of the median income. Every time it sells, another ten+ percent realtors fee has been added and the prior owners always want their investment back. The banks know that longer the term of the loan the more they stand to make because interest payments are front loaded.

These homeowners need to go through the foreclosure process or rent--the same home or elsewhere--and let the home sell for its NEW, lower value--especially after it is looted and trashed-- in a busted economy.

Bailing out the "homeowners" and/or lenders again is NOT a solution--it just delays the inevitable and at a cost the US taxpayer cannot afford.

[traceymarie]

11:58 AM on 04/17/2012

6% realtor fees
not front loaded
and people not banks do deserve help

[IndyFem]

08:08 PM on 04/17/2012

5% split by 2 brokers is the norm here. Where are agents getting 10% each??? I need to relocate there.

[SueZbell]

01:54 AM on 04/19/2012

Realtor fees do vary, but when I worked in a law office, many wanted ten percent--if that is more than the average, mea culpa.

YES, INTEREST IS FRONT LOADED: As a borrower pays off a thirty year mortgage, the first ten years are more interest than principle; the second ten years it begins to even out; only in the last decade does the consumer/borrower make payments that are more on the principle than on the interest. This I KNOW from personal experience.

No. People do not "deserve" help to protect "ownership". Although human decency says help people with food, water, basic temporary shelter, emergency medical care, "ownership" is not a necessity people "deserve".

If someone wants "help" with "ownership" when they face foreclosure, they should go through bankruptcy court to see if it is legally available. Otherwise, "Help" for something such as ownership should be given only voluntarily--such as habitat for humanity does. It should NOT collected from other taxpayers or put on a deficit already too large to be collected from the next generation.

This is called individual responsibility; it is the flip side of individual liberty.

[GetRealSoon]

07:41 PM on 04/16/2012

Easy money when nothing is done from the financial crisis turning criminal matters into civil.