Mortgage Scams: Obama’s plan to help these Families.

By: Sarah Horner
April 6, 2009

In an article from CNN.com today, Jennifer Liberto talked about the increase in recent mortgage scandals and how President Obama plans on combating this fraud. During this terrible recession families have absolutely no room for error and these shameless mortgage scams are reaching new lows.

Another article from a website called, Scambusters.org, they laid out “Equity Stripping,” which is described here, “the con artist "rescues" the homeowner by helping her get rid of the house. In one way or another, the scammer convinces (or tricks) the homeowner into surrendering the title to the house by promising that she can stay on as a renter and then buy back the house once things have been "fixed." In the end, the homeowner can't afford to buy back the house and the rescuers bleed the house of most (or all of) the equity.”

The second con is called “Phantom Help” this scam involves the following, “the supposed rescuer charges very high fees for basic phone calls and paperwork that the homeowner could have done himself. Often, the scammer promises to represent the homeowner to his lenders in an effort to "work things out," but never follows through.”

The Final scam is entitled the “Bait and switch,” in which the, “scammers masquerade as legitimate housing counselors, armed with mounds of legal documents -- often for new loans that are going to "solve" the homeowner's problems. In reality, the owner signs forged documents that give the scammers ownership of the home and to make things worse, the victims still owe money for the mortgage, but no longer have the asset!

These scams devastate families and while Obama has promised help, it cannot come quickly enough. Liberto’s article listed some pretty shocking statistics about mortgage loan frauds. Currently, the FBI is investigating more than 2,100 mortgage fraud cases, up almost 400% from five years ag. Obama has promised $75 Billion to try and rescue some of these families from mortgage debt cause by fraud.


References:

http://www.scambusters.org/mortgagescams.html

http://money.cnn.com/2009/04/06/news/economy/housing_scams/index.htm?postversion=2009040611