Foreclosure Rescue Scams on the Rise
Foreclosure rescue scams, in which con artists prey on struggling home owners, are becoming more of a problem, according to the Federal Trade Commission.The FTC has already filed three major foreclosure rescue cases this year, compared with zero a year ago; and one case involves thousands of victims and property worth millions of dollars, according to FTC regional director Brad Elbein, who heads the agency’s foreclosure rescue campaign.
Some scammers promise to negotiate with a lender for a fee, then just take the money and run. In other cases, home owners pay rent to live in the house but sign title to a rescue company that is supposed to pay the mortgage. Instead, the company sells the house, taking whatever equity is left.
At least 14 states have passed new laws this year to protect home owners, including a new one in Idaho that requires a written contract with a rescue company and gives homeowners five days to change their minds.
“The scope is probably going to be potentially as large as the mortgage fraud problem itself,” says Sharon Ormsby, the FBI’s chief of financial crimes.
Source: USA Today, Donna Leinwand (08/04/ 08