Foreclosure Rescue 101
- "Within days of showing up on [lists of new foreclosure cases compiled from public records by private companies], desperate homeowners are beset by hordes of supposed white knights."
- "The outfits are sophisticated, carefully targeting owners whom the tax records show have been in their homes for years, a sign they may be sitting on a nice chunk of equity."
- "Most commonly, the rescuers then coordinate what they say is a refinancing through a designated investor, or they arrange a deed transfer with a rent-to-own plan that will supposedly allow the owners to buy back their homes down the road. But usually buried within the stack of closing documents is a so-called quit claim, or deed of gift, in which the homeowners effectively sign their houses over to the investor. At that point, the rescuers charge the former owners rent high enough to ensure they can evict them and pocket the equity built up in the property."
- "Some of these operations are quite complex. A number of firms recruit staff through real estate seminars or late-night TV infomercials to work either as "door knockers," who pay visits to distressed homeowners, or as "bird dogs," who serve as fake buyers."
Included in the story are references to foreclosure rescue operator D and D Home Loans and owner W. Michael Robinson, of Virginia (referred to here in a prior blog post), and Real Estate Investor's Advantage (REIA), a reportedly now-defunct Fort Washington, Maryland outfit run by Nathaniel X. Arnold, who recruited "individuals with good credit to be both door knockers and bird dogs in these transactions. In return, they would be paid a flat fee or a cut of the profits." To become part of this group, individuals would attend an REIA seminar (and pay a fee of $1,995).
For more, see The Foreclosure "Rescue" Racket (As soon as a lender raises the red flag, scammers descend. Here's how they wind up holding the deed).
posted by Home Equity Theft Reporter at 7:50 AM
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