Last month, Michigan Attorney General Bill Schuette charged an organization known as Freedom by Faith Ministries with defrauding more than 100 consumers in Southeast Michigan. The alleged crime: foreclosure rescue scams.
Foreclosure scammers typically demand large, upfront cash payments from troubled homeowners and advise homeowners to stop making mortgage payments. They also dupe their victims into sharing important personal information such as Social Security and bank account numbers. After payment is received, the scammers do little or no work to obtain a loan modification for the homeowners. In the process, homeowners fall deeper into delinquency and also lose valuable time that could have yielded better results.
A new research report, Foreclosure Rescue, Inc. by the Lawyers’ Committee for Civil Rights Under the Law finds that foreclosure scams are beginning to take new forms while still fraudulently taking money from distressed homeowners. Some scammers falsely claim government affiliation while others include improper involvement of legal and real estate professionals
“African-American and Latino homeowners, already victimized by targeted predatory lending, have been victimized by scams at disproportionate rates compared to their percentage of the population,” said Yolanda McGill, manager of the Loan Modification Scam Prevention Network for the Lawyers’ Committee.
