Scam Companies Are Proliferating, Thanks to Foreclosure Crisis
July 15th, 2009
The foreclosure crisis has yet another outcome – it is breeding scam companies who are conning the harassed home owners.
Take for instance, the case of fifty year old Theresa Holstein. She was impressed by the name of the company – Federal Housing Aid. To her, the company seemed to be a government organization. Hence, when the company asked her to pay a cheque of $1,000 as fees for negotiating with her lender, she agreed.
The lady had faltered on mortgage payments after having lost her job and this offer came as a blessing to her. But no sooner had she paid the amount than the company officials vanished into the thin air.
As the American economy goes through a tail spin, scam companies promising a helping hand are flourishing by the dozen. They are duping struggling homeowners with the offer that they would modify mortgage payments in return for a fee. Generally the fees range from $750 and $1,000 but some even ask for higher amounts like $2,500. After obtaining the sum, they just vanish.
Although the government has publicized extensively that homeowners should not pay any fees in return for modification of mortgage amount, yet desperate homeowners fall prey to these con artists.
Bob Hart, a state principal assistant attorney general says that these companies are taking advantage of naïve people who are in dire straits. Those not fluent in English are the most gullible victims.
The attorney general of Ohio, Richard Cordray, has swooped upon many such fraud companies and closed them. The attorney general feels that the best way to uproot such fraudulent practices is to educate the people. To beep the message across to 11.5 million people in Ohio is a great challenge. Cordray also says that the economy is in such a poor shape that it may take quite a while for such fraudulent practices to be uprooted.
Holstein says that the moment her property foreclosed, she started getting numerous offers from companies that promised to speak to her lenders to rework her mortgage payment. Of course, she had to pay a fee for the services. Ultimately, she chose Federal Housing Aid because the name sounded as if it was an official company.
A local housing counselor says that the con artists know when a house is in the first stages of the foreclosure process. They then prey upon these hapless homeowners.
- Bouncing Cheques Issued by Title Companies Lead to Foreclosures
- Increase in Foreclosures Prompting Class Action Legal Suits
- Avoiding Foreclosures by Walking Away From Loans are not Without Problems
- Foreclosure Assistance Being Taken on Tour by Housing Advocate
- Washington Mutual, the Symbol of the Foreclosure Crisis, Continues to be in Trouble
- The Consequences of not Paying Mortgages Can be Grim
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