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
Legacy of Lydia Cladek
If it seems too good to be true, it is probably Lydia Cladek. She leaves investors with a cautionary tale longer than 20 years times 14 counts. Separate yourself from the fraudsters; check out offers through the Better Business Bureau (www.bbb.org), the Federal Trade Commission (www.ftc.gov), or your attorney. Just because an offer seems good does not necessarily mean you should walk away, but you may want to have an attorney review it. Having a disinterested party with the expertise to examine a deal from every angle is smart due diligence on your part. If the deal is legitimate, then you have spent a little money on legal counsel hopefully for a greater return. It could be a small investment to make a larger one. However, if the deal is not legitimate, then you have paid a little money to save your capital for a genuine investment. If it seems too good to be true, have a lawyer take a look at it. Attorneys’ fees are often cheaper to avoid a legal problem rather than once you have one. Read More