Predators Bilk Struggling Homeowners (Home Equity Theft Scams - Mortgage Fraud Alert)

The New York Times ^ | 07/03/2007 | Gretchen Morgenson And Vikas Bajaj

[goldstategop]

With the housing market in decline, financial predators are finding yet another way to take advantage of people who fall behind on their payments.

Shakeela Muhammad signed up for a mortgage program to save her home. The company stopped making payments, and she faces foreclosure.

The schemes take various forms and often involve promises to distressed homeowners of cash upfront, free monthly rent and a chance to retain their houses in the long run. But in the process, someone else takes over the deed, borrows as much as possible against the value of the house and pockets the cash. And, almost always, the homeowners still end up losing their homes.

There are no nationwide numbers on this common fraud, known as equity stripping, but it has turned up in almost every state. Seven states have passed laws to try to stop it. Still, with foreclosure rates rising rapidly, it will be a growing problem, consumer advocates say.

[goldstategop]

Home equity theft - the newest type of mortgage fraud. Women and minorities hit hardest.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[jammer]

Yes, but...

Ms. Johnson met with Home Savers officials and agreed to what she thought was a refinancing of her loan at a lower interest rate with more affordable monthly payments. But the Johnsons unknowingly transferred their deed to a straw buyer working with Home Savers, court documents contend.

I think it's stupid to blame, for example, a person who leaves his car keys in the ignition for the car theft--the car thief is the culprit. But there is SOME responsibility. In this case, Home Savers seems to be the culprit, but these people were stupid also. Didn't they have an attorney? How does one unknowingly transfer the deed?

[goldstategop]

When you refinance your loan... that shouldn't be the case. I've never heard of a title being transferred to a straw buyer. That's outright fraud. Of course, common with all scams, not just in real estate, is people's gullibility in believing they can stay in their homes and have someone else pay the bills. Some people are too stupid to recognize that old rule: TANSTAAFL. It would save them a lot grief and heartache in life.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[American in Israel]

Of course, staying out of debt is a solution like abstinence is to pregnancy.Both are based in "gotta have it now" and not wanting to pay the price.

[Moonman62]

People don’t usually think clearly when they are dessperate, and slick criminals know how to take advantage of that.

[Moonman62]

Most people use credit wisely. I think the real problem is people who are jealous of those who do so.

[RockinRight]

Sounds to me like a pretty obviously major risk.

Gotta scream caveat emptor here.

[RockinRight]

It’s not a refinance in that case, I think they actually SELL the home to the “Home Saver” company that then leases it back to them with a promise of them regaining title, but then they renege on it.

[Lx]

TANSTAAFL

Are you telling me that when HP, Dell and MS come here during lunch and bring food there's actually an ulterior motive, I'm shocked.

[RockinRight]

TANSTAAFL?

I should know the acronym...but don’t.

[RockinRight]

Whoops. Got it. Free lunch and all that.

[jammer]

There ain’t no such thing as a free lunch...Robert Heinlein.

[LIConFem]

Like my dad always told us:

a) If it sounds too good to be true, it is.

b) No one is going to give you something for nothing.

c) Trust no one in a suit.

[RockinRight]

I wear a suit. I resemble that remark.

[LIConFem]

Well, take it off then!! ;o)

[RockinRight]

Boss might get mad...

[LIConFem]

Then definitely keep it on. ;o)

BTW, read your FReeper home page. All I have to say is, yep! ;o)

[dearolddad]

Well, take it off then!! ;o)

I hope you are not suggesting that I take off my birthday suit.

[LIConFem]

Bet ya can’t do it! ;o)

[flutters]

LOL You guys know how to liven up a boring old mortgage scam thread.