Wisconsin Legislature Hears Testimony On Proposed Foreclosure Rescue Statute

The Associated Press reports:

• Some Wisconsin homeowners desperate to keep their houses have fallen prey to scam artists who falsely promise to help them avoid foreclosure, [Wisconsin] lawmakers said Tuesday. The salesmen use deceptive practices to convince homeowners to transfer ownership of their properties, which they refinance and sell for a profit, lawmakers and victims' advocates said. They testified during a public hearing in favor of a bill that would create new regulations governing so-called foreclosure rescues.

• Typically, those transactions involve a homeowner facing foreclosure transferring the property to an investor in exchange for assurances he can continue to live there under a rent-to-own agreement. The investor pays off the amount owed in foreclosure.

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• In written testimony, Louise Kirk said she faced foreclosure on her Milwaukee home after her husband had open heart surgery and lung cancer. She responded to a flier from a woman who promised help selling the home. The woman insisted she be granted power of attorney and Kirk agreed. The woman then sold the house without telling Kirk and made tens of thousands of dollars in profit, said Kirk, whose husband died around the same time. "My nerves were shattered with the death of my husband, but the fact that there was money taken from me, took me over the edge," Kirk wrote.

• Backed by the Legal Aid Society of Milwaukee, Kirk sued the woman last month in Milwaukee County Circuit Court for fraud. Legal Aid Society lawyer Catherine Doyle said another one of her clients agreed to a transaction in which she would rent her home from an investor for one year and then buy it. She still could not afford the home after one year because of high fees and rent charged by the investor, who sold it at a $50,000 profit.

• "She got nothing," Doyle said. Of her clients, she said: "When they find out how much money these people have taken from them, it is a devastating moment."

For more, see Wisconsin lawmakers say desperate homeowners are being swindled.

Go here for other posts on the Legal Aid Society of Milwaukee.

For more on equity stripping scams, generally,see DREAMS FORECLOSED: The Rampant Theft of Americans' Homes Through Equity-stripping Foreclosure 'Rescue' Scams (4.61 MB approx.).