On December 23rd, I wrote about the new Independent Foreclosure Review Process that had been ordered by Federal Regulators against major residential loan servicers such as BofA, Chase, Wells Fargo and many others. http://stevebeede.com/2011/12/the-independent-foreclosure-review-process/.  That process required the lenders to hire reviewers to contact borrowers who had been foreclosed in 2009-2010 and gather information on how the process was handled.  Theoretically, if an error occurred that caused a borrower to be damaged, there might be compensation available.  Well, it didn’t take long for the scammers to jump in.

Oregon’s Attorney General, John Kroger, has issued an alert that scammers are contacting Oregon consumers and offering to conduct an “independent foreclosure home loan review” or a “securitization review” for a fee. However, there is no costs at all for the real Federal program. “If you receive a letter suggesting that you qualify for compensation or received a grant without having requested an independent review from the federal government, it is a scam,” according to the warning issued by Kroger’s office. The alert bulletin stresses that a government agency will never request personal or financial information through email, and that any claims guaranteeing a mortgage modification or a stop to the foreclosure process should be a red flag.

 How this scam will play out remains to be seen but it certainly will attract those who think they were treated improperly.  Most likely the scammers will take the victim’s “review fee” and then disappear.  Others may act as front men for attorneys that promise they will sue the lenders and “make them pay”. Often, the only payment that will occur is the money transferred from the gullible victim to the predatory scammer.

California and many other states have been cracking down on law firms and others who pray upon those in default or have lost their homes to foreclosure. The California Attorney General’s Mortgage Fraud Strike Force has been created to protect innocent homeowners and bring to justice those who defraud them. http://oag.ca.gov/consumers/loan-modification. They offer “5 Tips to Avoid Being Scammed”:

1)   Don’t pay up-front fees. Foreclosure consultants are prohibited by law from collecting money before services are performed.

2)  Don’t ignore letters from your lender or loan servicer. Responding to those letters is your best bet for saving your house.

3)  Don’t transfer title or sell your house to a “foreclosure rescuer.” Beware! This is a scam to convince homeowners they can stay in the home as renters and buy their home back later. It might also be part of a fraudulent bankruptcy filing. Either way, a scammer can then evict the victim and take the home.

4)  Don’t pay your mortgage payments to anyone other than your lender or loan servicer. Mortgage consultants often keep the money for themselves.

5)  Never sign any documents without reading them first. Many homeowners think that they are signing documents for a loan modification or for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership of their home to someone who is now trying to evict them.

If you are upside down on your California property or have lost your home in foreclosure and need help in determining what to do, we at BPE Law are here to help.  We offer a $200 flat fee one hour attorney consultation program that can help you understand the process, determine what your options are, and select the best strategy for your situation. And we can do this in person, by phone, or even by e-mail. You can reach us by e-mail at sjbeede@bpelaw.com or by phone at 916 966-2260.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are upside-down on your loan(s), especially if you’re facing a lender lawsuit, get competent legal advice in your State immediately so that you can determine your best options.

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