Foreclosure Fraud Stinging More Victims

By: Bobi Samms

In these tough economic times, mortgage foreclosure rescue scams are sweeping the nation. Foreclosure rescue fraud is both devious and cruel. Escalating foreclosures provide criminals with opportunities to profit from desperate homeowners. While foreclosure scams vary, they may be used in combination with other fraudulent schemes. The government is struggling to hold back a wave of foreclosure "rescue? scams arising from the growing number of homeowners facing the loss of their homes. It may be fighting a losing battle. For instance, perpetrators may view foreclosure-rescue scams as a new method for fraudulently acquiring properties to facilitate illegal property-flipping and equity-skimming. The bait and switch with foreclosure scams involves signing away the ownership of your home.
In recent times, state regulators have been trying desperately to alert the public to a fairly new and dangerous threat regarding companies calling themselves "foreclosure rescue operators". These companies claim they can assist homeowners facing foreclosure with options that allow them to keep their property. Homeowners have complained to state attorneys general with complaints about for-profit loan modification consultants. While some of these outfits are legitimate, authorities say many are con artists.In reality, these "options" give foreclosure rescue operators the tools in which to take your home away from you.
Fraud for profit schemes often involve a group of people who defraud a prospective homebuyer or mortgage lender. For example, a dishonest mortgage broker may partner with a loan processor to create a fictitious credit profile, and with an appraiser to inflate the property value. Additionally, "straw borrowers," who falsely represent themselves, may be enticed to participate through the promise of financial gain. Manhattan real estate developer Michael Hershkowitz was sentenced to four years in prison for his participation in a $27 million Ponzi scheme involving fraudulent loans secured by nonexistent mortgages. According to the documents filed in the case in Manhattan federal court: Hershkowitz, working through a Manhattan real estate development company, The Kingsland Group, Inc., and related entities, fraudulently induced approximately 100 individuals to lend the Kingsland Group over $27 million to fund the renovation of approximately sixteen multi-family apartment buildings located in upper Manhattan.
Homeowners, finding it difficult to make ends meet and facing foreclosure, are promised help to save their homes. These scammers often turn around and steal the homes from those they promised aid to. Some collect large fees for services never provided and are never seen from again. The perpetrators convince homeowners that they can save their homes from foreclosure through deed transfers and the payment of up-front fees. This ?foreclosure rescue? often involves a manipulated deed process that results in the preparation of forged deeds. Some scammers will file a bankruptcy in the homeowner's name without consent or knowledge. In extreme instances, perpetrators may sell the home or secure a second loan without the homeowners' knowledge, stripping the property's equity for personal enrichment.

Article Source: http://yourfinance.co.za