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'Foreclosure Alley' Easy Pickings for Mortgage Scammers

Black Voice News.com, News Report , Chris Levister Posted: Jul 13, 2009

Foreclosure is a way of life in California with repossessed homes now dominating the real estate market. One in every two homes sold in June in Southern California had been repossessed. Put another way, 700 families lose their homes every day. One of the hardest hit areas is Riverside and San Bernardino Counties known as foreclosure alley.

Foreclosure filings were reported on 50,885 properties in the Riverside-San Bernardino metro area in the first quarter, up 41 percent from the previous quarter and 37 percent above the level reported for the first quarter 2008, according to the latest RealtyTrac U.S. Foreclosure Market Report. Riverside/San Bernardino in June ranked sixth among the nations metropolitan areas in the rate of foreclosure activity, with one foreclosure related filing for every 80 homes.
Still among the highest in terms of foreclosures, Riverside-San Bernardino has recently seen an increase in real estate sales as prospective buyers take advantage of the embattled markets falling prices.

So its little wonder that as a recent moratorium expires and foreclosures rise, the area is easy pickings for mortgage modification scammers.

The FBI is currently investigating more than 2,800 mortgage fraud cases, a 400 percent increase from five years ago.

The scams are especially prevalent in the Inland Empire once considered the bedrock of home construction activity according to the California Department of Real Estate which is reporting a statewide explosion from 10 cases a year ago to more than 750 this spring.

The fraud includes sales-leasebacks, quitclaims, stripping homeowner equity and misleading homeowners into signing over deeds.

As new legislation aimed at helping troubled Americans avoid foreclosures slowly takes hold, con artists are taking advantage of unsuspecting homeowners, says Travis Hamel Olsen, president of National Short Sale Center.

The fraud usually comes through in the fine print, but foreclosure rescue teams and highly suspect scammers are basically taking homes through a variety of sophisticated means, resulting in foreclosure and eviction.

Dozens of fake websites mimic the fonts and layouts of government websites that are designed to help struggling homeowners modify their mortgages. Some unsuspecting homeowners have fallen prey to unscrupulous companies that charge up to $7,000 before disappearing.

In October 2008, the state attorney general offices filed a 39-count complaint charging former San Bernardino County married couple Juan Jose Perez and Isuara Hernandez and several associates with multiple felony counts of grand theft, money laundering and conspiracy. Five of Hernandez and Perezs associates pleaded guilty; but the couple said to be the ringleaders, are suspected of fleeing to Mexico where they continue to operate. Authorities say more than $1 million flowed through a series of bank accounts. Most of the money law enforcement officials say crossed the border to banks in Mexico.

With 20 percent of the nations homeowners underwater, the government is introducing legislation aimed at steering struggling homeowners toward short sales. The governments new plan will pay a servicer $1,000 for completing a successful short

sale, it will pay the borrower $1,500 to assist with relocation expenses, and it will pay second lien holders who release their claims up to $1,000.

Under no circumstances should anybody be paying an upfront fee to complete a short sale, said Olsen. Unscrupulous companies use a myriad of ways to take advantage of unsuspecting homeowners.

Many distressed homeowners are confused about short sales and fall for deceptive offers including phone calls, letters, advertisements and e-mails (also known as phishing).

Usually if the deal seems too good to be true, cautioned Olsen, then it probably is.

Related Articles:

American Homeowners Borrowed Too Much, Economist Concludes

Banks Recover as Housing Foreclosures Hit Record Highs

Recession Continues to Curb Blacks' Dream of Home Ownership

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