Beware of Up-Front Fees in Foreclosure Rescue
If a foreclosure rescue scheme seems too good to be true, it could cost you a lot. The legislature passed the Foreclosure Rescue Fraud Prevention Act in 2008. This act specifies that no fees are to be paid by the borrower until the rescue services are fully rendered, and that a written contract with terms and conditions has to be signed by both parties before services begin. Furthermore by 2010, anyone performing loan modification services had to have an active license from the Florida Office of Financial Regulation. Besides up-front fees, other things to look out for when you are looking for hope include: Instruction NOT to contact your lender, lawyer or credit or housing counselor Payment only accepted in cashier’s check or wire transfer Guarantee to stop foreclosure no matter what Encouragement for you to lease your home so you can buy it back over time Mortgage payments to be made directly to the company rather than your lender Request for you to transfer your property title to the company The Florida Bar cautions: ‘If any business or individual offers to help you stop foreclosure immediately by signing a document authorizing them to act on your behalf or to [...] Read More
Nigerian Letter Scam
A Nigerian Letter scam does not have to come from Nigeria, nor does it have to be a ‘letter.’ This type of fraud can be from any country in the form of a letter, email, voicemail, or even a text on your cell phone. But the result is the same…and it is not pretty from the victim’s perspective. A Nigerian Letter (often referred to as a Nigerian 419) tries to access your personal finances. The scam plays on your sympathy and greed—you think you will make a fortune just by helping out a stranger, but the perpetrators want to empty your bank account. The scam works like this: Step 1: You are sent a form of payment for a large amount, like $8 million. Step 2: You deposit the payment into your account, and you are instructed to keep part of it, say $4 million. Step 3: You wire transfer the remaining $4 million to the sender. Step 4: Everything in your account is drained because you have insufficient funds to cover a $4 million check. Step 5: That $8 million never cleared into your account before you sent the wire transfer of $4 million. Step 6: You owe the [...] Read More
Foreclosure-Rescue Fraud
Just because you are facing foreclosure does not make you exempt from fraud. You may think you have hit bottom, but you will know you have hit it if you are the victim of a foreclosure-rescue scam or loan-modification fraud. The broad base of distressed homeowners has opened a market for a variety of services. Not all of them are legit. The Florida Bar has the following ten tips to help you avoid foreclosure-rescue and loan-modification scams: 1. Contact your lender directly before reaching out to a third party making promises. 2. Avoid businesses that guarantee favorable outcomes. There is no legitimate way to promise any particular outcome with respect to defaulted and under-water mortgages (mortgages in which the amounts owed cost more than the houses are now worth). 3. Avoid businesses that ask for up-front charges for loan modification or foreclosure rescue. This practice is specifically prohibited by Florida law. 4. Do not work with businesses that instruct you not to contact your lender, attorney or financial counselor and to make mortgage payments directly to them. 5. Avoid businesses that use names or symbols that mimic federal and state programs or falsely suggest they offer legal services or are [...] Read More
Stern, Madoff, & Cladek – Where Are They Now?
Here are a few figures who used to make headlines (and money)…not so much anymore: David Stern, Bernie Madoff, and Lydia Cladek. The masks they wore to hide their fraudulent features have obscured them from public decency. If you are looking for a Halloween costume, a robo-signer festooned by David Stern is pretty scary—signing off on home foreclosures without even glancing at the files, trampling like a zombie through paperwork that would part people from their homes. In lawsuits filed this year, Stern is the defendant against his partner firm, DJSP Enterprises, as well as against a class action brought by his former employees for lack of adequate notice when they were all fired in 2010 prior to the collapse of Stern’s business in 2011. The Bernie Madoff mask would be a fright with his trick-and-no-treat Ponzi scheme on the scale of $20 billion in fraud to investors. Madoff is currently occupied serving his 150-year prison sentence. Though he claimed he acted alone, his brother, Peter Madoff, plead guilty this summer to conspiracy and falsifying records in the scheme, which raises suspicion of further family involvement, including his wife, daughter, and remaining son. Furthermore, prosecutors have dug back to the [...] Read More
Short Sale Straw Market
The Chinese calendar will probably name 2012 as “Year of the Short Sale.” The Mayans have already marked it as the apocalypse. Short sales in real estate have become a popular way to avoid foreclosure. If you can find a buyer and convince the bank they would be better off to take what money they can now for the property rather than letting it go all the way to the courthouse steps, then the bank recoups part of its loss and you retain more credit than you would in a foreclosure. Hooray for both sides. But with the rise of short sales comes an increase in short sale fraud. A number of fraudulent schemes are trending now in short sales, including: Reverse staging – not pretty – the seller makes the house look more distressed than it actually is to lower the Broker price Opinion (BPO) False indication on a short sale listing, hiding the fact that a low bid already exists Flipping – a buyer buys a house without putting in any of his own money and then sells it a few hours or days later to a legitimate buyer at a much higher price Manipulate the HUD [...] Read More
The ‘Fraud’ Word in Foreclosure
In legal terms, ‘Fraud’ is the ‘F-word’ of courtroom cursing. It is a dirty word that you do not use in polite company…and you better not say it in court unless you absolutely mean it. Some words are easier to say than to prove…‘Fraud’ is one of them. In foreclosure defense, Fraud is one of the hardest arguments because you have to plead the facts up front, and often the borrower does not have the facts. There are three issues you have to deal with if you cry Fraud in a foreclosure defense: 1. The person at the bank you are dealing with today did not initiate the loan. 2. Proof of intent. What shows that fraud was knowingly committed against you? 3. Yeah, good luck with that. Just because Fraud is difficult to argue in foreclosure defense does not mean it does not happen. However, have an attorney review your case before you cry fraud in foreclosure defense. There are a lot of options and there are a lot of resources, and there may be an argument better suited to fit your case. Read More
Left Behind by ID Theft
You wake up one morning and all your account balances are zeroed and your credit is blank…like you never existed. It might not be a spiritual crisis; you could be the victim of Identity Theft. Somebody could have pick-pocketed your personal finances and used your hard-earned resources for their gain and your loss. Prevention is the best policy. The Federal Trade Commission (FTC) offers nine prevention methods, including: 1. Protect your Social Security number 2. Trash your trash and mail carefully 3. Be on guard when on the Internet 4. Use intricate passwords 5. Verify sources before sharing information 6. Safeguard your purse and wallet 7. Store information in secure locations 8. Credit freeze 9. Identity theft insurance (For details on each of these, visit the FTC website at http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/deter.html.) If it is too late for prevention, the FTC suggests these four defensive measures: 1. Place a fraud alert on your credit reports, and review your credit reports. 2. Close the accounts that you know, or believe, have been tampered with or opened fraudulently. 3. File a complaint with the Federal Trade Commission. 4. File a report with your local police or the police in the community where the [...] Read More
First Four Steps After Identity Theft
There could be a lot of reasons a diamond necklace could show up on your credit card bill. a. You just always wanted a diamond necklace and so you finally went out and bought one for yourself. b. There was a clerical/technical error which erroneously charged to your account. c. Your personal financial information has been stolen and somebody else is wearing what should have been your diamond necklace. “Charge it to the Underhill’s,” was Chevy Chase’s line for everything in the 1985 movie Fletch. Fast forward twenty-seven years and identity theft is a popular and prevalent crime. It targets the rich and the unguarded at any income level. The Federal Trade Commission (FTC) offers four steps you should take immediately if you are the victim of Identity Theft: 1. Place a fraud alert on your credit reports, and review your credit reports. 2. Close the accounts that you know, or believe, have been tampered with or opened fraudulently. 3. File a complaint with the Federal Trade Commission. 4. File a report with your local police or the police in the community where the identity theft took place. To learn more, visit http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/defend.html. No one is you-er than you. Be [...] Read More
Bankruptcy Fraud
The best way to avoid a bankruptcy fraud charge is not to commit the fraud. Duh! So you decided to file bankruptcy and you want to keep a few nest eggs…keep in mind that fraudulent transfer of assets, concealment of assets, or disobeying or making a false statement to the court could be reasons for being denied a bankruptcy discharge…and could get you fined or imprisoned on criminal charges. It is not a good idea to lie to your parents or your spouse, but do not lie to the court. Cover your assets by disclosing them to the bankruptcy court, and let the court do its job to help you through your debt. Also keep in mind, bankruptcy is an individual issue with consequences that you need to understand. Good legal counsel can review the equity involved and what else is going on, like your credit card situation, and can help you decide if bankruptcy is the right step for you. A competent bankruptcy attorney can assist you in following the correct legal procedure and avoid misunderstandings which could lead to fraud charges. Read More