The Department of Justice today announced that eight people were indicted for $35 million of mortgage fraud in Maryland.
You can likely find their names on other sites. I won’t list them out here. What’s more important is to understand what they allegedly did so that if you’re facing foreclosure you won’t fall for a similar scam.
“The indictment alleges that the defendants used a ‘foreclosure-prevention’ scheme to cheat homeowners out of the remaining equity in their houses by transferring their homes to straw buyers,” said U.S. Attorney for the District of Maryland Rod J. Rosenstein. “The defendants then defrauded lenders by inducing them to make new loans based on inflated appraisals and fraudulent credit applications.”
So if someone asks you to sign over your home to someone else watch out. It’s pretty likely that regardless of the promises the person offering to help you makes, you won’t get your home back.
Apparently in this case, those who were indicted today promised to help people get their homes back in a year if they signed them over to a third party. During that year the defendants promised to help people fix their credit and get better mortgage loan rates.
What they did instead was apply for mortgage loans using faulty information such as appraisals that were too high and inaccurate credit applications.
If you’re facing foreclosure call your lender and talk about your situation. Try also the National Foundation for Credit Counseling (nfcc.org).
If you have the urge to use a company to help you save your home call the Better Business Bureau and see if any complaints have been filed and call your state government as well. Do an online search and see if the company or any of its officers have been in the news.
And by all means don’t sign your home over to someone else.
June 13, 2008