DREAMS FORECLOSED: The Rampant Theft of Americans' Homes

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DREAMS FORECLOSED: The Rampant Theft of Americans’ Homes Through Equity-stripping Foreclosure “Rescue” Scams ll. Why Do Homeowners Fall for These Scams A scam by its nature disguises its intent and that’s certainly the case here. The predominant theme of virtually all the come-ons for this scam is one of “rescue,” when in fact it’s all too often the type of “rescue” Harvard Law School bankruptcy expert Elizabeth Warren refers to as “the cement life jacket.” How do “rescue” scammers get homeowners to take the bait A checklist of a few of the scam artist’s best friends, all of which you will find in this report: SATURATION MARKETING of “rescue” services, with lies, exaggerations and pressure tactics common. TRUST: Exploiting either the homeowner’s belief that someone would not lie to his or her face -- a belief reinforced by that slew of sympathetic-sounding and often face-to-face sales pitches – or the homeowner’s belief that s/he is in the process of being helped when in fact s/he’s being led down the road to ruin. KEEPING THE HOMEOWNER IN THE DARK about the foreclosure process, its deadlines, his/her legal rights in the process, and low-cost alternatives that can save the home. This often goes hand-in-hand with another favorite scam artist’s tool…. FRAUD AND DECEPTION, including but not limited to forgeries, piles of complex documents that disguise the “rescuer’s” equity-stripping intent, and documents that conveniently run out of space for signatures on pages containing text, meaning that the homeowner signs a blank page that can then be fraudulently married to an entirely different document. DESPERATION to save the home, obtain needed cash or get a fresh start, again in an atmosphere where the homeowner is encouraged to believe there’s very little time to act. “AFFINITY MARKETING,” where African-Americans market these scams to African-Americans, Christians to Christians, older folks to older folks, Spanishspeaking to Spanish-speaking, military to military, and so on. The idea is that people like you are on your side, and what’s more they’re protecting you from those who don’t have your best interests at heart. This is perhaps one of the most cynical and heartless weapons in the scam artist’s arsenal. LACK OF ECONOMIC SOPHISTICATION that causes many homeowners to fall for what amounts to extremely high-interest loans, or gigantic fees for just a few days (or hours!) of work. The homeowner simply doesn’t realize how expensive the deal is, and it doesn’t help that terms of these deals are quite often disguised. 10
DREAMS FORECLOSED: The Rampant Theft of Americans’ Homes Through Equity-stripping Foreclosure “Rescue” Scams CALIFORNIA SCHEMIN’: TWO STORIES A taste now, on the following two pages, of what these scams means to real people in one hard-hit region. NCLC’s Steve Tripoli visited two Southern California residents after their cases were brought to our attention by local legal services attorneys and California Attorney General Bill Lockyer’s office. It’s important to note that these cases, bad as they are, represent two homeowners who found their way to an attorney before their homes were irrevocably lost, though the fate of one of those homes remained in doubt as of mid-May 2005. Unfortunately even such limited victories, stressful though they might be, are far from typical. Time and again we hear from attorneys, consumer advocates and law enforcement officials that the number of victims losing their homes or big chunks of home equity to these scams far outweighs the number of clients they see. That’s because most victims simply don’t realize they’re being scammed even when they lose their homes. They think that’s just the way foreclosure works and that nothing more could have been done, a perception often happily reinforced by the people ripping them off. 11
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DREAMS FORECLOSED: The Rampant Theft of Americans' Homes

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