DREAMS FORECLOSED: The Rampant Theft of Americans' Homes

DREAMS FORECLOSED: The Rampant Theft of Americans’ Homes Through Equity-stripping Foreclosure “Rescue” Scams
When NCLC’s investigator visited Los Angeles lawyer Manuel Duran he gave us
copies of seven foreclosure “rescue” lawsuits he’d filed, two of which he’d been able to settle
on terms favorable to the homeowners.
“My last three, the homeowners had equity losses of $128,000, $50,000 and $30,000,”
he says. “The scammers are making more doing this than they were doing mortgage re-fi’s
(refinancing).”
Duran says promises to refinance past-due mortgages are often part of the “rescue”
scam.
“They promise to save you. They say, ‘I can get you a re-fi.’ In California you get 90
days to cure the default, and 21 days to stop the (foreclosure) sale. The scammers let that time
slip away and then say ‘you don’t qualify for a re-fi, but I have a solution for you,’ and the
solution is to sign the house over.”
Duran’s partner William Flanagan says many of the firm’s clients “are highly
susceptible to being manipulated. They have no clue about how they can tap into the equity
from their houses themselves, or even the value of what they’re sitting in. And they don’t want
to hear ‘you’ve gotta sell the house’ when they’re in trouble. So right at that moment, in walks
someone who says they’re not going to have to sell.”
Flanagan’s developed a hardened view of the foreclosure scammers.
“They’re sociopaths,” he says. Then he points to his wallet on a nearby desk for
emphasis, saying: “If I leave my wallet on that table most people won’t take it. But a sociopath
will say: ‘If you’re stupid enough to leave it there you deserve to lose it.’”
ll. COLORADO:
"We're struggling to get our arms around it"
Foreclosure scams are "an absolutely epidemic problem here," says Deputy Colorado
Attorney General Garth Lucero. 5 "We're struggling to get our arms around it. They use
amazingly confusing paperwork intentionally, to make it hard for us to litigate."
Lucero says scammers his office has encountered include a group that took dozens of its
victims' homes and another targeting the Spanish-speaking community. "It's really picked up in
the last 4 to 5 years," he says, "and it's tied to the massive creativity in mortgage lending and all
this pushing of re-financing."
5 Lucero left the attorney general's office for private practice after we spoke with him in January.
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