Foreclosure Rescue Scams: A Nightmare Complicating the American Dream
The report addresses the concerns surrounding foreclosure prevention rescue scams. The research study was conducted for a period of three months in mid-2009 using “fair lending matched pair testing” or mystery shopping” to assess the extent of the problem. Findings of the study demonstrate that an aggressive legislative solution and added public and private oversights and enforcement are necessary to prevent consumers from being harmed.
Foreclosure modification scams have been a problem for years. However, this insidious practice has become more prevalent in the recent increase of foreclosures. Scammers mislead homeowners into believing that they will get a modification that significantly lowers their payment, or stabilizes an exploding adjustable rate mortgage or “ARM.” Common scams perpetuated against consumers, include phantom help, reverse mortgages, title theft, and short sale fraud. Often times, scams come in the form of ads in the newspaper, internet, public files at local government offices, television and personalized letters to homeowners.