The possibility of losing your home to foreclosure can be terrifying. The reality that scam artists are preying on the vulnerability of desperate homeowners is equally frightening.The American Bankruptcy Institute Journal reports mom-and-pop scam operations are turning up across the U.S. What is a foreclosure scam? The Bankruptcy Foreclosure Scam Task Force defines a scam as "filing for bankruptcy to defraud creditors, without intending to comply with the requirements for obtaining a bankruptcy discharge or completing a repayment plan."
In 1998, an L.A. perpetrator was sentenced to six years in prison, and $71,000 in restitution for the involvement in 200 fraud bankruptcy filings. The scams don't stop in California. United States Trustee Program personnel report that these scams are "geographically widespread" and vary in methodology. Last week, the AGO settled with four people in Mass. who were previously charged with orchestrating foreclosure scams. The businesses had to pay restitution to all clients from whom they received money.
It is difficult to catch a scam before it is too late. Who should you turn to mortgage advice? The official blog of Massachusetts Attorney General Martha Coakley advises contacting your lender directly, or choose to work with one of many local community organizations for free mortgage assistance.
Click here for a list of approved counseling agencies in Mass.
