Investigative Reports Gives Look At How Some Foreclosure Rescue Operators Work
Two recent investigative reports by the Miami Herald gives a view of some of the tactices used by some foreclosure rescue operators when scamming unsuspecting homeowners.
1) One firm, National Foreclosure Management, obtained weekly lists of homes set for foreclosure.
2) It recruited ''field analysts'' to go door-to-door, hawking its ''home saver'' program. At its peak, more than 60 people fanned out into South Florida neighborhoods. Reportedly, one field analyst was being paid $4,000 each time a homeowner signed up.
3) Part of the program involved offering "credit counseling" and "financial-planning courses."
4) On Saturdays, the field analysts would pile into National Foreclosure's Miami Lakes office to discuss strategy and to role-play, honing their sales skills.
5) According to one former field analyst, there were people from different walks of life, including teachers teachers and police officers, seeking to make extra money in off hours.
6) In mailings to homeowners, the firm pledged to ensure ''that you regain full rights and ownership to your home.'' It offered to equip clients "with the necessary tools need[ed] to improve your financial planning skills.''
7) Once willing homeowners were found, it matched them with ''investors'' who would act as "straw buyers." These investors rarely saw the homes they were buying, but lent their names and credit for a fee, with the understanding that the original homeowner would take the home back in a year.
8) Upon consummation of a "home saver" deal, which was structured as a sale leaseback transaction with a right to buy back the home after a period of time, the operators would "strip the equity" from the home with high fees and unexplained charges that were paid from the funds.
10) In the cases reported in the investigative reports, both the financially strapped homeowners seeking help as well as the straw buyers were left holding the bag, as each thought that the other was making the payments on the new mortgage, which ended up in foreclosure.
For more, see:
Foreclosure 'rescue' deals shackle homeowners (Homeowners who accepted help to avoid foreclosure have gone to court with claims that they were stripped of equity in their homes).
$66,000 'servicing fee' gobbles much of owner's profit on sale (The buyer thought the seller was making the new mortgage payments; the seller assumed that the buyer was doing it).
Homeowner complaints are similar: false promises, hefty fees.
1) One firm, National Foreclosure Management, obtained weekly lists of homes set for foreclosure.
2) It recruited ''field analysts'' to go door-to-door, hawking its ''home saver'' program. At its peak, more than 60 people fanned out into South Florida neighborhoods. Reportedly, one field analyst was being paid $4,000 each time a homeowner signed up.
3) Part of the program involved offering "credit counseling" and "financial-planning courses."
4) On Saturdays, the field analysts would pile into National Foreclosure's Miami Lakes office to discuss strategy and to role-play, honing their sales skills.
5) According to one former field analyst, there were people from different walks of life, including teachers teachers and police officers, seeking to make extra money in off hours.
6) In mailings to homeowners, the firm pledged to ensure ''that you regain full rights and ownership to your home.'' It offered to equip clients "with the necessary tools need[ed] to improve your financial planning skills.''
7) Once willing homeowners were found, it matched them with ''investors'' who would act as "straw buyers." These investors rarely saw the homes they were buying, but lent their names and credit for a fee, with the understanding that the original homeowner would take the home back in a year.
8) Upon consummation of a "home saver" deal, which was structured as a sale leaseback transaction with a right to buy back the home after a period of time, the operators would "strip the equity" from the home with high fees and unexplained charges that were paid from the funds.
10) In the cases reported in the investigative reports, both the financially strapped homeowners seeking help as well as the straw buyers were left holding the bag, as each thought that the other was making the payments on the new mortgage, which ended up in foreclosure.
For more, see:
Foreclosure 'rescue' deals shackle homeowners (Homeowners who accepted help to avoid foreclosure have gone to court with claims that they were stripped of equity in their homes).
$66,000 'servicing fee' gobbles much of owner's profit on sale (The buyer thought the seller was making the new mortgage payments; the seller assumed that the buyer was doing it).
Homeowner complaints are similar: false promises, hefty fees.
For Criminal Prosecutors
For cases involving the criminal prosecution of foreclosure rescue operators, see Foreclosure Rescue - For Criminal Prosecutors Only.
posted by Home Equity Theft Reporter at 8:03 AM
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