Foreclosure Fraud - Stealing the American Dream

Consumers are really feeling the financial pressures in these tough economic times and scammers are out in droves looking to rip-off anyone they can.

A recent report by the Better Business Bureau in British Columbia outlined the top ten scams for 2008.

The report went on to say that the best defense is knowledge - you need to know the danger signs and how to protect yourself.

Here is the top 10 scams of 2008:

1. Economic Downturn Scams - There are small business cash advances which offer thousands of dollars for business ventures despite the proprietor's credit rating. These types of opportunities often come with up-front fees, and excessive interest charges. In some cases, it may even be attempts to gain information for identity theft.

2. Home Repair Rip-Offs - Unscrupulous and unqualified people often show up to homes with offers to do everything from landscaping to roofing. Get the name and address of the company the vendor claims to represent and check it with the BBB and the city-licensing office. Verify the individual is licensed, bonded, insured, has registered with WorkSafeBC (Workers' Compensation Board) and find out about your cancellation rights.

3. Business Opportunities - This is most likely a pyramid scheme. The new capital brought on by new investors is keeping this imaginary investment afloat. Ask questions such as: who are the principals of the company? When did the company get started? How much is the start-up cost?

4. Bogus Online Ads - While those classified websites offer free access to hundreds of ads, beware that those listings are rarely vetted prior to posting. The seller may not be legitimate. Do not wire money to complete an order you have purchased from a stranger. This money will be impossible to recover if the product you purchased does not arrive.

5. Cure-All Health Products - Any product that claims to be a miracle cure may be a fraud that could cheat you of time, money and most importantly, your health. Consult your health care practitioner before trying any new treatment.

6. Guaranteed Vehicle Brokers - A caller claims that if you list your vehicle on their classified site and the vehicle is not sold within 90 days, you will get your money back. Unfortunately, your vehicle is not sold, the guarantee is not honoured, you can't reach the company and you are out of pocket the funds you have given this company.

7. Prize Offers: You Don't Have to Pay To Play - If there's a catch or condition, you haven't won. If it sounds too good to be true, or you're not sure, check the offer out further.

8. Bogus Checks and Overpayment Schemes - Fraudsters typically target people selling a product through classified ads, online bulletin boards or people looking for work on employment postings. The scammer sends a check for the listed product or service that is more than the negotiated price. The original check is usually stolen or is a fake, and by the time the victim has cashed and returned the excess funds, the scammer has disappeared with the money and the product.

Another check overpayment scheme can be under the guise of working as a mystery shopper. The victim believes that they will be paid to mystery shop a wire transfer service. They are sent a check, told to deposit it, keep a small percentage of the money as their wage, wire the rest, and then complete the survey on the service they encounter. The address turns out to be bogus, the money wire transferred to another unknown location and the victim is out the money transferred.

9. Eco Cons ­- Are you buying it? - There are a number of products on supermarket shelves that are green, eco-friendly, all natural or environmentally safe. A study by TerraChoice Environmental Marketing, found evidence of greenwashing ­- making false or misleading green marketing claims - in 99 per cent of products checked.

10. Spoofing Attacks - You may receive an e-mail that looks like it is from an organization you know, or visit a webpage that looks like it is from your bank. The key common tactic is to get you to either fill in personal information or download malicious software on to your computer to compromise your security and put your identity and money at risk.

So be careful out there and question everything that is offered you. It's up to you to protect yourself.

Foreclosure Fraud Alert
The Foreclosure Fraudblog Alert

Hope for Home Ownership Relief Act
My take on this bill is that it will be a dismal failure. Any program being run by the crooks in our federal government, combined with lenders that have pocketed billions of dollars in government handouts,the screw the homeowners attitude of lenders, the high upfront costs to the homeowners (who are already behind on payments)and the fact that only a small percentage of homeowners will be covered means certain failure.
The Hope for Homeowners Act of 2008 is intended to provide mortgage relief for homeowners that have home mortgages they can no longer afford. The Act authorizes the Federal Housing Administration (FHA) to insure up to $300 billion of 30-year fixed rate loans for homeowners so they can refinance out of their existing loans into an FHA.
Here is a summary of what's in the Act:

Hope for Homeowners follows FHA's long-standing requirement that new loans be based on a family's long-term ability to repay the mortgage. Only owner occupied homes are eligible for FHA-insured mortgages. So if you have a second home or an investment property, they are not covered. Borrowers must also meet the following eligibility criteria:

* Their mortgage must have originated on or before January 1, 2008;
* Their mortgage debt-to-income must be at least 31 percent;
* They cannot afford their current loan;
* They did not intentionally miss mortgage payments; and
* They do not own second homes.

Features of FHA-insured loans under the new program include:

* 30-year, fixed rate mortgage;
* Maximum 90 percent loan-to-value ratio;
* No prepayment penalties;
* $550,440 maximum mortgage amount;
* Extinguishment of any subordinate liens; and
* New home appraisals from FHA-approved appraisers.

HUD, Treasury, FDIC and the Federal Reserve will form the Congressionally-mandated Board of Directors and work together to establish additional program standards.

Voluntary Lender Participation

This is where the success of the bill gets dicey because the lenders have generally taken the recent government bailout money and used it to pay the bonuses for their corporate officers. FHA wants lenders to offer homeowners an alternative to foreclosing on borrowers. Lenders have been encouraged to write-down the outstanding mortgage principal balances to 90 percent of the new value of the property. In many cases, reductions in principle will cost lenders less than the losses associated with foreclosure. However, I have seen that most lenders are not cooperating with distressed homeowners. Only God knows what the lenders have done with the their government handouts, they certainly have not used them to help home owners.

Funding

FHA is insuring up to $300 billion in new loans. Borrowers will pay an upfront premium of 3 percent of the original mortgage amount and an annual premium of 1.5 percent of the outstanding mortgage amount. This means that most homeowners will not be able to take advantage of the program - after all, if you are behind on your mortgage payments to begin with - who has 3% to put down. Any additional costs incurred by FHA will be reimbursed by Fannie Mae and Freddie Mac (remember these two companies that recently received multi billion government bailouts and then rewarded their CEOs with multimillion dollar bonus packages?).

Program Timeline

The program will last from October 1, 2008 through September 30, 2011
So what do you think? Will this really help any homeowners or will it just make bank CEOs wealthier?

Having financial difficulty? Many lenders will want to help you find solutions, although some like BOA will tell you to go to @$^%.


The basic approach for home lenders to help home owners that are behind on payments it to offer:



* Payment plan options
* Modify your interest rate
* Modify your monthly payments

These are some of the ways lenders may be able to help you, but you must Call them.


Relief Starts with a Phone Call
Everyone goes through difficult times, and that's when you need someone on your side the most. Whether you have questions about your mortgage or home equity, our trained associates have solutions that may be right for you.


Mortgage and Home Equity
If you're having trouble keeping up with payments, we may be able to help you get back on track with:


* Repayment plans up to 12 months
* Extensions from 1-3 months
* Modifications to the rate, term and monthly payment of your loan or line of credit
* Debt management programs with internal or nonprofit independent agencies

The sooner we can talk, the sooner we can try to help.


Housing and Urban Development (HUD) can help you too.
HUD is a U.S. government agency that increases home ownership and supports home buyers. HUD offers free or low-cost counseling throughout the country. To find out where the nearest counseling agency is in your area, please call (800) 569-4287.



Your Next Steps:

Call your lender today.
Please be prepared to discuss household income and expenses.
You should collect together and be prepared to fax or mail one or more of the following and have ready when you call:


* Have your Loan Number and Property Address at hand
* A brief explanation of your circumstances
* Recent income documents (such as Pay stubs; Benefit statements from Social Security, Disability, Unemployment, Retirement, or Public Assistance. If you are Self-employed, have your tax returns or a Year-to-Date Profit and Loss statement available for reference)
* Bank Statements and Tax Returns for Past 2 Years

To Your Success and Survival!



Mark Schwartz

The Foreclosure Fraudblog - Avoid
Foreclosure Scams and Fraud


and MS Buys Houses.

Are you one of the thousands of homeowners that are behind on making your house payments? If yes, the information we are going to share with you can change your life.

There are many other homeowners, just like you, that have worked long and hard to become homeowners. And now, for a variety of reasons they are in danger of losing their homes to foreclosure because they have fallen behind in their mortgage payments.

It doesn't matter if you are a teacher, doctor, waitress or truck driver - foreclosure can hit anyone, and if you are in foreclosure it is up to you to do something about it. Only you can protect yourself, your home and your family.

It's bad enough that you may be in danger of losing your home to foreclosure, but to make things even worse there are people out there that are looking to take advantage of you and the situation you are in. If you know how they work their evil you can protect yourself from their scams.

It all starts when the bank publishes notice that you are behind on your house payments. As soon as the predators find out they will arrive at your doorstep posing as caring friends and they will promise to solve your problems.

The predators will play on your fear about losing your home. They will try to scare you and increase your worries over how you are going to catch up on payments. And they will try to hound you into making decisions favorable to them - not you.

They could care less about your problems; they only want to know - how to get your house, your money and your equity?

* Is it possible that you could be a target of these foreclosure fraud artists? YES it is!
* Can you protect yourself from becoming a victim of foreclosure fraud? YES you can!
* Can you save yourself, possibly your home and your pride by fighting back? YES you can!

These so called Foreclosure Rescuers want to profit from your financial misfortune and they have a bag of tricks and ploys that will astound you. In reality, their solutions will create more problems for you than you ever imagined.

They will try to destroy your pride and sense of well being. They may even talk you into filing for an inappropriate bankruptcy, snooker you into mortgage fraud or convince you to give them the deed to your home. Then the local Sheriff shows up with an eviction notice and it is too late.

.......unless you take steps to prevent it all from happening.

What is a Short Sale?

The brief version is that it is a loss mitigation workout program where the lender accepts less than the full payoff amount due from the borrower.

The longer version is that a short sale is the sale of a property, with the authorization of the creditors, for less than what is owed on it.

Short sales are done all the time and have increased in frequency with the increase in foreclosures. Simple stated, it is the forgiveness of debt owed by a homeowner and means that the lender is willing to settle for less than what they originally anticipated.

It's all part of business as all lenders know that they will not win all the time and have 100% performing loans. Risk and loss of capital are anticipated in the lending industry and are a cost of doing business. Changing economic conditions, financial hardship and medical reasons are some of the many causes of unforeseen situations that turn good lending contracts into bad.

In the context of foreclosure on secured assets like real estate, a short sale occurs when debtors agree to settle their liens for a known amount of money as opposed to taking a chance at auction. Foreclosure auction prices are often unpredictable and usually greatly discounted. Many lenders are willing to mitigate further risk of loss by making deals before auction. Bad debt is sold by lenders all the time. For example, there is a huge market for unsecured credit card debt that is sold for pennies on the dollar to collection agencies.

Generally, a short sale should be considered by homeowners whose financial hardships require that they sell their home, but who face problems selling because the value of the property has declined to less than the amount owed on their mortgage. A short sale may be considered at any time prior to foreclosure if the alternative means a lender will incur greater losses through foreclosure and be forced to acquire the property.

In order to consider a short sale, a homeowner or real estate professional must submit a signed purchase contract and a HUD 1 settlement statement to the lender. Once the purchase and sales agreement is submitted and the other documents needed (financial statement, proof of income (paycheck stubs, bank statements and tax returns), authorization to release and hardship letter) are also submitted the qualification process begins.

Homeowners - if you are behind in payments contact your lender ASAP and start working with them on a resolution. You must take action.

To Your Success and Happiness
Foreclosure Fraud Alert
The All About Real Estate Blog

There are many rogue foreclosure rescue consultants out there that approach distressed homeowners, in danger of losing their homes to foreclosure, with promises that only they can save their homes from foreclosure. This is totally false. These are promises that cannot be made and in fact are illegal in many states.

Also, many of these foreclosure consultants will try to charge distressed homeowners an up-front fee as payment for their rescue services. These are taboo in many states (at least Washington where I live). Never, ever pay an upfront fee to a foreclosure rescuer - most of them are scams.

"Foreclosure Rescue Fraud - Recent foreclosure rescue actions"

March 25, 2009

By PATRICK CROWLEY of www.MortgageDaily.com

A cottage industry has sprung up involving companies that promise to help delinquent borrowers avoid foreclosure, then collect big upfront fees and perform no services -- leading to a foreclosure anyway. But federal and state law enforcement officials are cracking down with criminal charges, convictions and lawsuits.

In one far-reaching case, the Federal Trade Commission said last month that it charged National Foreclosure Relief Inc. and its operators -- David Ealy, Chele Stone and Hugo Tapia -- with falsely claiming to either stop foreclosure or provide a full refund. The U.S. District Court for the Central District of California has frozen the assets of, and issued a temporary restraining order against, the foreclosure rescue firm.

National Foreclosure allegedly used direct mail ads to promote its "Fresh Start Program," which offered negotiations with lenders for upfront fees ranging from $300 to more than $11,000, the FTC said. But once borrowers paid the money, they never heard from the company again. When they called in and finally reached a representative, they were falsely told that "negotiations are proceeding."

In Las Vegas, Jack Ferm -- who hosted the talk radio show Straight Talk -- has been arrested on two counts of felony theft and related charges in connection with the operation of U.S. Justice Foundation. Nevada Attorney General Catherine Cortez Masto described the company in a March 11 statement as a "mortgage rescue scam."

Ferm allegedly charged up to $2,500 for his services but did little or nothing to help modify clients' loans.

California Attorney General Edmund Brown announced last week the arrests of Mary Alice Yraceburu and Marianne Curtis, who are accused of "coldy and heartlessly" conning more than 160 victims out of thousands of dollars in a foreclosure scam. The state filed 49 felony charges in Orange County Superior Court against the two "scam artists" who operated Foreclosure Freedom.

Brown said the two, who face more than 20 years in prison, took thousands of dollars in fees but failed to deliver loan modification services.

"Victims were assured the company had private lenders and specialists exclusive to their company who are very experienced in the options and methods used to renegotiate home loans, yet neither of the women who operated the company had real estate licenses, legal training, or any experience in the home mortgage market," Brown said.

Brown also recently announced guilty pleas by, and the sentencings of, three people who operated out First Gov of San Bernardino. Sentenced for grand theft were Rosa Conrado and Alejandrina Maldonado. Both received prison sentences. Martin Jesus Flores was given probation based on his limited participation in the scheme.

David Giron and Saul Amador have been charged with theft, money laundering and conspiracy, according to the state. Three other members of the ring -- Juan Jose Perez, Isuara Hernandez and Antonia Gonzalez -- are believed to have fled the country, according to Brown.

Brown said that the ring members promised victims they would renegotiate their mortgages and reduce monthly payments. They demanded an up-front fee, ranging from $1,500 to $5,000, to participate in the loan-modification program.

Victims were told to stop making mortgage payments and communicating with their lenders to avoid interfering with the loan modification process, Brown said. After collecting their fees, ring members pocketed the money and did nothing to help the victims.

In Florida, Attorney General Bill McCollum announced last month that his office filed a lawsuit in Orange County Superior Court and obtained a temporary court order preventing FMA Servicing from charging up-front fees to modify loans. Orlando-based FMA, which does business as Financial Management Advisors, allegedly charges an up-front fee as high as $2,500 to borrowers seeking loan modification services.

"The company subsequently refused to change its business practices even after receiving notification of the Foreclosure Fraud Rescue Prevention Act which took effect on Oct. 1, 2008," McCollum said.

McCollum also field a suit against Lincoln Lending Services LLC, which allegedly targeted Hispanics in a "foreclosure rescue fraud" scheme, a statement Monday said. The Miami company charged up-front fees, a violation of state law.

To get around the law, Lincoln charged customers $2,700 for "forensic analysis" services, then signed a contract for promised modification services. The fee was allegedly created to "circumvent" a new state law that McCollum helped create last year.

McCollum wants a court to prevent Lincoln from doing business while the case is litigated.

New Jersey Attorney General Anne Milgram filed two lawsuits that accused Hope Now Financial Services of Cherry Hill and New Hope Modifications of Bellmawr of running fraudulent loan renegotiation scams, a press release earlier this month said. Both companies allegedly sold loan modification services without delivering to customers as well as created the false impression of being affiliated with Hope Now Alliance.

New Hope Financial allegedly stole $29,000 from 23 customers. New Hope is accused of taking more than $98,000 from 80 victims.

The Federal Reserve Board issued a March 5 statement {on FederalReserve.gov} warning borrowers to avoid foreclosure rescue firms that charge upfront fees or only accept payments by cashier's check or wire transfer. The fed said housing counselors and other resources are available at no- or low-cost to assist homeowners who have fallen behind on their mortgage payments. The U.S. Department of Housing and Urban Development publishes an online list of legitimate certified counselors it endorses.

FTC v. New Hope Property LLC, et al.
Case No. 1:09-cv-01203-JBS-JS, FTC File Nos. 092-3068 (D.N.J.)

FTC v. Hope Now Modifications LLC, et al.
Case No. 1:09-cv-01204-JBS-JS, TFC File No. 092-3079, (D.N.J.)"

****
So be careful, never pay an upfront fee, never sign over the deed to your home, and never believe anyone that Promises they can save your home.