Foreclosure prevention scammers get caught by FBI.

“If you can’t kick someone when they are down, when can you kick them?” is something my ex sister in law used to say. I thought of that as I read a story in the Wall Street Journal about a group of scammers (arrested by the FBI) who convince people facing foreclosure that they can fix the situation; only to steal all the equity left in the house and disappear.

The basic scam is this: They buy lists of people whose houses are headed for foreclosure and look for some that have equity left in them (when the mortgage is less than the current value of the house). They tell people in that situation that they will maintain the mortgage payments until they (the owners) are able to pick them up again. All you (the homeowner) have to do is turn the house over to an “investor” and pay an affordable rent until you are ready to take over payments again. Often the paperwork they ask the homeowner to sign is unclear and the homeowner is not aware that they are signing over control of their house.

The scammers then use their ownership of the house to refinance, taking out all the equity they can, and then they run, leaving the homeowner with a new, larger mortgage and no equity.

If anyone tells you that you can save your house by bringing in an outside investor, do not believe them. You could lose your home and any equity you may have remaining in it.

Information on legitimate organizations that will help you with foreclosure prevention and mortgage modification. 

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