Foreclosure help scam shut down in Illinois

What you should know to avoid becoming a victim of “foreclosure help”

The real estate market has been booming in the United States for the past five years or so. With interest rates rising, sales have fallen off as the cost of loans has increased to the point where a lot of people simply cannot afford to buy. When rates were low, buyers were using any means available to buy houses, including risky loans such as Option ARM mortgages. Now that rates are higher, foreclosures are on the rise, as thousands of people are now realizing that they cannot afford those houses after all.

When foreclosure becomes a problem, the vultures descend upon the market. In the real estate industry, these people often come in the form of companies that offer “foreclosure help.” One such company, Mutual Trust, along with seven title companies, were recently charged with fraud in the state of Illinois. The mortgage fraud scam that this company was engaged in is very similar to those that can be found elsewhere. The company would meet with homeowners who were on the verge of losing their homes to foreclosure and they offered to help. The help, they claimed, would come in the form of a third party who would borrow money from Mutual Trust and buy the victim’s home temporarily. After buying the home, the third party would lease the home back to the victim while they tried to get their finances in order. At some point in the future, the victim was told that they could buy the home back from the third party.

That didn’t happen. There were a lot of financial shenanigans going on, the the money never found its way to the mortgage company of the victims and they ended up losing their homes permanently. This is typical of this scam; the companies offer “help” but what they really want is for you to sell them your house for next to nothing. Even better, they would like you to give them your house. It often works, as people who are about to lose their homes to foreclosure are often desperate and will sign documents without bothering to read them thoroughly.

How can you avoid being a victim of this sort of crime? Here are some suggestions:

• Call your lender - If you have trouble paying your home loan, discuss your troubles with your lender. They would rather not foreclose if they can help it. It’s expensive, and then they end up with a house they don’t want. They aren’t in the housing business; they are in the lending business. They will work with you if you let them.
• Read documentation - If you should engage a third party to help you with your problems, read the documentation and make sure that you get all promises made by them in writing. Verbal contracts are not necessarily binding, and you don’t want to risk your house on a verbal agreement. If you aren’t sure about the documentation, seek out the help of a lawyer. The money you spend for a few hours of an attorney’s time will be worth it.
• Don’t sign documents that give away your property. Doing so means that you lose your house. It doesn’t necessarily mean that you don’t have to repay your loan. You could end up with the worst situation imaginable - no house and a large loan.

You don’t want that.