McLeod Law Offices

Five people have been indicted in a foreclosure scam coming out of Southern California.

From DailyBreeze.com:

The defendants visited homeowners defaulting on their mortgages and offered to stop their foreclosures with short-term loans and refinancing options. But instead of applying for refinancing, the defendants allegedly submitted loan applications to banks under the names of the homeowners.

The defendants allegedly pocketed the loan money from the banks, which were never repaid. The victimized homeowners, meanwhile, lost their property titles, according to the indictment.

Foreclosures continue to spike here in Massachusetts, and nationwide. There are a number of bottom-dwellers out there preying on people who may be facing a foreclosure. According to a report from today’s Winston-Salem Journal, these scams on rising all over the country. The president and chief executive of the local Better Business Bureau had this to say:

“At-risk homeowners are bombarded with offers…Just take a look at the signs at the nearest phone pole or intersection. Smooth-talking salespeople appear everywhere, eager to buy your property and promising to ’save’ your home by paying off the amount that is overdue on the loan.”

He said that homeowners are often talked into moving out and deeding the property over to a third party, who tells them they can rent the property with the option to buy it back later. But the rent payment is often higher than the homeowner can afford. If homeowners decide to buy back the property, the price is typically too high for them.

More good news on a dreary day: Today Massachusetts Attorney General Tom Reilly announced that his office is investigating “several individuals and businesses who allegedly target homeowners by offering to ‘rescue’ them from foreclosures, but instead trick them into deeding over their property.” He urges homeowners who think they have been victims of a foreclosure “rescue” scam to call the Consumer Hotline at 617.727.8400.

His office also issued a consumer advisory warning homeowners not to fall victim to mortgage foreclosure scams.

“Families in Massachusetts are being squeezed on all sides – from soaring gas prices to utility and health care costs.” AG Reilly said. “Now as foreclosure rates are going up, we’re hearing complaints about companies taking advantage of people who are trying to save their homes. Consumers need to be careful. I urge homeowners facing foreclosure to talk with licensed professionals, including lawyers and real estate professionals, before entering into any agreement or arrangement involving their home.”