Foreclosure scam artists are one of the most dangerous predators in the real estate industry, targeting homeowners who are in desperate situations and tricking them into giving up their homes or much-needed cash that could be used to pay the mortgage or begin the process of financial recovery. Unfortunately, many borrowers are taken in by these sociopaths, who use the same old tactics over and over again to persuade owners to trust in unrealistic schemes that promise everything from saving the house to lowering the monthly payment with virtually no work or input from the homeowners.



One of the latest foreclosure scams to be caught, this time in Monterey County, California, targeted dozens of homeowners and ended up taking more than $65,000 from desperate foreclosure victims. The Mercury News reports on this story in which three suspects have been caught and charged with criminal conspiracy. One suspect has also been charged with numerous other crimes, including "residential burglary, elder abuse, and grand theft." But how they took advantage of their victims is another case study in the tried-but-true tactics of scammers.

"The trio allegedly promised their victims, mostly Spanish-speakers in danger of losing their homes to foreclosure, that they could help negotiate lower monthly mortgage payments or refinance mortgage terms with lenders.

"Prosecutors allege the suspects met with prospective "clients" from Feb. 10 to June 15 at a Gonzales home, where the homeowners gave the trio their loan information, filled out loan applications and paid advance fees of as much as $2,800 for the "service."

"Though the suspects allegedly told their "clients" the money was a "loan processing charge" and "fully refundable" if the renegotiation efforts failed, when several of them requested a refund they were denied. Eventually, the 'clients' were unable to contact the suspects."

In three short paragraphs, homeowners can learn exactly how most foreclosure scams work. An individual, usually representing an official or reassuring-sounding company approaches borrowers in default and promises to help them in any number of ways to stop foreclosure before time runs out. The owners, many times elderly or foreigners who speak English as a second language, fall for the charm and convincing nature of the scammers, and sign up for the service without performing enough due diligence to know if they can trust the company.

The fact that the scam artists took loan information from the owners in this situation described above is simply a charade designed to get the homeowners comfortable with giving information and eventually money in order to save their home. The victims mentioned in the article gave nearly three thousand dollars to the scammers and received nothing for the time and resources they expended trying to avoid the loss of the house. This is far too common a tactic used by foreclosure scams, which pretend to do a lot of work but really just do everything they can to wring money out of homeowners.

Finally, refunds and calls back from bona fide foreclosure con artists are virtually nonexistent in the real estate market, although guarantees of "fully refundable processing charges" are ubiquitous. Once homeowners hand over a money order for thousands of dollars, the scam operators disappear, moving onto their next targets and leaving previous clients to deal with their own foreclosure mess. Not getting a call back from an assistance company is one of the most common characteristics of this type of fraud, because the company does not dedicate resources to communicate with clients it has no intention of helping in the first place.

It is too bad that so many homeowners rely on others to help them avoid foreclosure when just a little bit of guidance, research, and advice can help them work with their lenders on their own. Hiring a company to provide legal research or document lending law violations can be a much-needed service, while other professionals can provide high quality loss mitigation assistance with valuable homeowner input. But simply handing over a check and expecting someone to "take care of" foreclosure is most often a trap laid by psychopaths taking advantage of the desperation of the possibility of losing a home.