Consumer Alert
Many people who are in the foreclosure process are
desperate to save their home, and with that is
vulnerability from con artists intent to prey on this
desperation.
'Mass Joinder' Lawsuits or Class Action Litigation
California Department of Real Estate (DRE) and the BBB
has released consumer warnings about 'Mass Joinder'
Lawsuits or Class Action Litigation scams.
The Better Business Bureau (BBB) warns homeowners to
steer clear of mailings asking them to join national
“mass joinder” lawsuits to force their mortgage
companies to cut their loan payments.
Michelle Corey, BBB president and CEO, says the mailings
are a new twist on schemes to obtain up-front payments
of $5,000 or more from homeowners struggling to pay
their mortgages. Some mailings are tied to businesses in
St. Charles County.
See related video "Mass Joinder Lawsuit Hustlers
Exposed":
http://www.youtube.com/watch?v=R4AyzE3Gs0E&feature=youtu.be
This alert is written to warn consumers about marketing
companies, unlicensed entities, lawyers, and so-called
attorney-backed, attorney-affiliated, and lawyer
referral entities that offer and sell false hope and
request the payment of upfront fees for so-called “mass
joinder” or class litigation that will supposedly result
in extraordinary home mortgage relief. They are making a
wide variety of claims and sales pitches, and offering
impressive sounding legal and litigation services, with
quite extraordinary remedies promised, with the goal of
taking and getting some of your money.
FORECLOSURE RESCUE SCAMS
Bait and Switch Scam
You think you’re signing documents for a new loan to make your existing mortgage current, but you don’t understand all the fine print and just signed documents that surrender the title of your house to the scam artist in exchange for a “rescue” loan. DO NOT sign any documents without reading and understanding them first. If the document is too complex, seek advice from a lawyer or an approved, trusted financial counselor. Never sign documents with blank spaces that can be filled in later by the other party or one that contains errors or false statements, even if someone promises to correct them later.
Share in profits of selling your home
The fraudulent foreclosure consultants offer to find a buyer for your home and pay you a portion of the profit when the home sells only if you sign over the deed and move out. Sometimes a fake buyer is brought in to make it a quick process. Once you transfer the deed, the scam artist simply rents out the home and pockets the proceeds while your lender proceeds with the foreclosure. In the end, you lose your home – and you’re still responsible for the unpaid mortgage. That’s because transferring the deed does nothing to transfer your loan obligation.
Rent-to-Buy Scam
In a similar scheme, the fraudulent foreclosure consultants ask for you to sign over the title as part of a deal that allows you to remain in your home as a renter, and to buy it back during the next few years. You may be told that surrendering the title will allow you to get a better credit rating to refinance the home to prevent the loss of the home. They may rent it back to you (if they haven’t just evicted you outright), but over time steadily increase the rent to the point that you are unable to make the payments. Then they sell your house and take off with the equity. DO NOT sell your house or transfer he title as these fraudulent foreclosure consultants. This is a common scheme used to evict homeowners and steal all or most of their home's equity.
If you think this may have happened to you, you may be a victim of a crime and need to file a complaint with your States' Attorney General's Public Inquiry Unit. Reporting con artists and suspicious schemes helps prevent others from becoming victims.
Bankruptcy Fraud Scam
There are several scams circulating that are abusing the bankruptcy laws. For example, a con artist may offer to obtain refinancing or negotiate a payment plan with your lender and even may even file a bankruptcy case in your name, without your knowledge, as a part of the scam.
In another kind of scam, a con artist may ask you to give a partial interest in your home to one or more persons. Each holder of a partial interest can then file bankruptcy, one after another. The bankruptcy court will issue a “stay” order each time to stop foreclosure temporarily. However, the stay does not excuse you from making payments or from repaying the full amount of your loan.
Here are some red flags to watch for:
- They instruct you to pay your mortgage payments to someone other than your lender, even if they promise to pass the payment on to the lender
- They instruct you to transfer your property deed or title to them
- They instruct you to rent your home so you can buy it back later
- They pressure you to sign documents that you do not understand
- They nstruct you to sign documents that have blank spaces that they can fill out later themselves
- They offer to fill out the paperwork for you
- They are non-attorney / law firm and collects an upfront fee before providing you with any services
- They instruct you not to contact your lender, lawyer, or credit or housing counsellor
- They guarantee to stop your foreclosure process regardless of your circumstances
Do NOT transfer or surrender property titles or entertain offers to buy house at a below-market price.
Do NOT bypass the lender and make payments directly to any third party individual or company.
NMAC encourages users to contact their lender, lawyer, credit counselor, or housing counselor.
If you think any of these has happened to you, you may be a victim of a crime and need to file a complaint with your States' Attorney General's Public Inquiry Unit. Reporting con artists and suspicious schemes helps prevent others from becoming victims.
You may modify your own mortgage directly with your lender, use resources at HUD, or find out now if you qualify for a Loan Modification Plan for free, just fill out the no obligation form below:
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