Mortgage Fraud Feeding Off High Foreclosure Levels
With foreclosures already at high levels and predicted to rise in the next couple of years, it's no wonder there is a serious concern about more mortgage fraud schemes victimizing homeowners.
Recent incidents throughout the United States prove this concern about mortgage fraud to be more than justified.
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A Northern California man may face additional charges in his already extensive real estate fraud case. Michael Llamas, 22, is accused of misleading an old couple and selling their home against their wishes.
According to a story on InsideBayArea.com, the elderly couple used Llamas' business, Property Line Investments, to get a reverse mortgage on their home but were later surprised to hear that they're home had been sold. Llamas got the couple to sign papers, including the deed to their home, with the belief that they would get a reverse mortgage and never provided them with copies. A neighbor later informed the couple that their home had been listed as sold in a notice, and the couple quickly found out that they were no longer on the title of the home.
Police officers have seized files and computers from Llamas' company as evidence in the ongoing investigation. -
A Minnesota Spokesman-Recorder story details how predatory mortgage lenders have been taking advantage of homeowners in the Twin Cities of Minneapolis and St. Paul, where there were more than 2,000 mortgage foreclosures combined in 2006.
According to the story, predatory mortgage lenders have forced many Twin Cities' homeowners into foreclosure and massive debt by promising loans with "too good to be true" interest rates and cash. These predatory home lenders paint a rosy picture for homeowners but actually trick them into borrowing more money than they can afford to pay and then deftly raise interest rates on these loans.
Unethical lending is such a concern in Minnesota that incoming Attorney General Lori Swanson announced the formation of a study group to draft legislation prior to her even stepping into office. The legislation would make sure that borrowers got an appropriate loan with a reasonable interest rate, limit mortgage pre-payment penalties, and require that lenders provide full disclosure about the loan. -
Mortgage fraud has been a big problem in Denver, which was described by one expert in a Rocky Mountain News story as the "wild, wild west of mortgage fraud."
Denver was listed as one of the top cities for mortgage fraud in 2005 and the developments in 2006 didn't help curtail the problem. 2006 Denver foreclosures surpassed record totals set in 1988.
The story describes one scheme in which people are led to believe that they will receive more money for their house by making a "gift donation". However, the phony buyer simply takes the donation and never makes a mortgage payment. In another scheme, homeowners think they are refinancing their mortgage but are actually signing a deed making them renters in their own homes.
These incidents are just some examples of mortgage fraud schemes plaguing homeowners throughout the United States.
These examples reveal how intricate these schemes can be and also depict the importance of meeting with an experienced lawyer in your area that you can trust when facing foreclosure.
Foreclosure can be a very stressful experience that can cloud a homeowner's thought process and make him or her do something that they'll later regret, like falling into further financial difficulties after unknowingly getting caught up in a mortgage fraud scheme.
Even if foreclosure is a realistic possibility, it may not be the end result. Refinancing, debt workout plans and Chapter 13 bankruptcy are just some foreclosure options that may be a benefit to your needs.
If you're facing foreclosure and interested in a certain plan to help save your home, be sure to run it by an outside lawyer who is not involved with the process to make sure that you are not being duped!