ANOTHER FRAUD AGAINST SENIOR CITIZENSOct 21st, 2011 | By Sharon Shaw Elrod MSW EdD | Category: Senior Finances
Senior Victims of Foreclosure Scams
Senior Citizen Journal has written about fraud perpetrated against seniors in the past. We know seniors are easy targets because we grew up in a time when being polite and ‘nice’ was how we were taught to behave. We fall prey to aggressive marketing that targets our vulnerabilities. We’re generally not good witnesses because of cognitive issues many of us experience, and we hesitate to report being victimized because of how it makes us look.
However, there is a new scam out there now that hits us with one of the most valuable possessions we have: our home.
Seniors are not immune from foreclosures. And when one of us gets a notice from the bank that the process is beginning, we tend to panic. The con artists are standing by to take advantage of our distress.
The Lawyers’ Committee for Civil Rights Under Law reports that, “In the first six months of this year, more than 40 percent of all reported victims were 51 or older, up from 36 percent in July through December 2010 and 26 percent from October 2009 to June 2010.” Since February 2010, seniors in this age group experienced losses exceeding $16 million.
How the Scam Works
The schemes used by scammers vary, but the ultimate loss generally comes in the form of fees seniors pay in advance of any ‘service’ performed. They promise to provide relief from foreclosure, and do not make good on the promise.
AARP recently identified six ways scammers get our attention, after finding foreclosure information in public records:
- “Lawsuit lures. In the latest variation, you receive a letter inviting you to join a class action lawsuit against your mortgage company. This bogus offer is made more believable by the widely publicized “robo-signing” scandal of last year, in which lenders were accused of hiring unqualified people to falsify foreclosure paperwork en masse.
- “Phony counseling. For an upfront fee of hundreds or thousands of dollars, self-proclaimed “experts” (they may claim to be lawyers) say they can negotiate a deal with your lender to reduce your mortgage payments or save your home.
- “Phoney forensic audits. Crooks offer to review your mortgage documents to determine whether your lender complied with state and federal laws. The claim is that the resulting “audit report” will help you avoid foreclosure, speed up a loan modification or reduce or even forgive your mortgage. “Nothing could be further from the truth,” says the Federal Trade Commission in a consumer alert.
- “Rent to buy. Scammers say that if you surrender your home’s title to them, you can remain under your roof as a renter and buy the home back later.
- “The sell shell. Fraudsters offer to find a buyer for your home, but only if you sign over the deed and move out. Once the deed is transferred, they rent the home to someone else and pocket the proceeds while your lender goes ahead with the foreclosure.
- “The “sign here” shuffle. The granddaddy of foreclosure rescue gotchas is a simple bait and switch, with your signature as the scammer’s goal. Under the guise of some promise — an “assistance loan” of $10,000, for instance — you’re asked to sign a stack of paperwork. Buried deep within, amid a rushed “sign here, initial there” routine, is a document that sells your home for $10,000. You get a check that you think is a loan, but in fact it’s the fire-sale price of your house.” (AARP Bulletin, October 10, 2011)
Bottom line, seniors, is stay with reputable counseling agencies if you need help with your mortgage, and if you are facing foreclosure on your home. The mortgage industry also has a website that offers help for families in danger of losing their homes.