I have said this many times, but my personal pet peeve is hearing of scammers who try to take advantage of people who are victims of these economically difficult times. It is bad enough that many homeowners are suffering and find themselves in a situation where they are unable to pay their mortgages. But far worse to believe they are victimized again a second time when they put their hopes on people who profess to be there to help. Sometimes even the lenders are engaged in practices that are bordering on scams called dual track foreclosure.
Every time one of these scammers is identified, I get worked up and get into my crime busting mode……. So here we go again.
The first tell tale sign of a fraud or scam is that the so called service providers are asking for payments up front, before any work has been performed. ALWAYS BE LEERY OF THESE REQUESTS. There are multiple variations of these pay-first scams.
A recent scam identified by the California Department of Real Estate (DRE) involves up front payment to join a class action lawsuit which promises extraordinary home mortgage relief. A brief description of the con has been reposted below for review purposes.
QUESTIONABLE AND/OR FALSE CLAIMS OF THE SO-CALLED MORTGAGE LOAN
DEFENSE OR “MASS JOINDER” AND CLASS LITIGATORS.
A. What are the Claims/Sales Pitches?
They are many and varied, and include:
1. You can join in a mass joinder or class action lawsuit already filed against your
lender and stay in your home. You can stop paying your lender.
2. The mortgage loans can be stripped entirely from your home.
3. Your payment obligation and foreclosure against your home can be stopped when
the lawsuit is filed.
4. The litigation will take the power away from your lender.
5. A jury will side with you and against your lender.
6. The lawsuit will give you the leverage you need to stay in your home.
7. The lawsuit may give you the right to rescind your home loan, or to reduce your
8. The lawsuit will help you modify your home loan. It will give you a step up in the
loan modification process.
9. The litigation will be performed through “powerful” litigation attorney
10. Litigation attorneys are “turning the tables on lenders and getting cash settlements
In one Internet advertisement, the marketing materials say, “the damages sought in your
behalf are nothing less than a full lien strip or in otherwords [sic] a free and clear house if
the bank can’t produce the documents they own the note on your home. Or at the very
least, damages could be awarded that would reduce the principal balance of the note on
your home to 80% of market value, and give you a 2% interest rate for the life of the
There are many varieties of scams identified and collected by the DRE over the years, some of them are listed below in the Consumer Alerts page for your benefit. http://www.yourhome.ca.gov/fraud_warning.pdf
Homeowners in distress, I know you are in desperate situation and are seeking any and all assistance you can find, but please don’t let your situation cloud your judgment. Be the wise consumer that you always have been. Please check on the people who profess their desires to help you. Know who you are dealing with before you give them any money.