Life In Wake Forest NC.....

Foreclosure Rescue - Bankruptcy 

Bankruptcy courts are being used to defraud homeowners facing foreclosure.

How it works:

Distressed homeowners are lured through advertisements that claim to assist them from losing their home.  The homeowner pays a non refundable up-front fee, typically ranging from $200 to $1,000.  In many cases the homeowner is convinced to stop talking to their lender and told they must make regular monthly payments to the Rescuers.

The Rescuers direct the homeowner to complete the necessary paperwork which includes signing a bankruptcy petition. 

This gets filed with the homeowner's name using either the signed petition or a forged petition.

The bankruptcy petition postpones the foreclosure (invoking automatic stay) and the homeowner stops receiving collection calls and letters.  Homeowners are unaware of the bankruptcy petition and believe that the Rescuers have fulfilled their obligation to prevent them from losing their home.  The homeowners are also told to ignore any court notices to appear at the bankruptcy hearing. However, when no one appears at the bankruptcy hearing, the foreclosure process begins again. 

In a variation of this scheme, the homeowner will “quit-claim” the property to the Rescuer or will sell their home for a nominal fee, usually $1.  The homeowner agrees to pay them rent with the understanding that they can buy the home back when the problems are resolved or they will share in the profits if the home is sold.

In some property transfers, the homeowner is told to transfer only a fractional interest in the property to the Rescuer who then transfers that interest to another individual or entity (often fictitious).  The fractional interest can be transferred over and over as the automatic stays are lifted, which delays foreclosure for months and generates additional “rent money” for the perpetrators. 

            Another disturbing fraud scheme is Arson.  Homeowners commit arson and then  file a fraudulent

            claim to avoid foreclosure.  

Watch ABC news video regarding arson to avoid foreclosure       

Information for this series was gathered from mortgage fraud blog, the FBI 2008 fraud report and the IRS.

Home loans since 1977

  First Priority Financial is licensed by the California DRE # 654852  Nevin's California DRE license 016552

  The opinions expressed in this blog are not necessarily those of First Priority Financial.

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