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 “We have seen cases where the foreclosure rescue people take out new mortgages on the property that exceed the original mortgages by more than $200,000. The homeowners never see any of this money and, needless to say, they can't afford to make the new mortgage payments, which are much more expensive than their original mortgage. The foreclosure rescue people then file eviction proceedings against the homeowner.” Amiri says an effort is under way to enact state legislation curbing foreclosure scams. She says supporters are hoping to introduce a bill this spring but don’t expect action on it until New York’s next legislative session. Upstate, Rebecca Case Grammatico of the Public Interest Law Office of Rochester reports that she’s investigating a case where her client “paid $650 to this ‘stop foreclosure’ company but they never contacted the mortgage company (to work out the past-due loan). Then they demanded more money to pull her out of foreclosure after I had already negotiated a deal with the lender.” Xlll. NORTH CAROLINA: "We've yet to see one....actually work" Assistant Attorney General Harriet Worley reports that the state “has filed two cases against companies which advertised as ‘WE BUY HOUSES,’ in which they ended up taking title to a consumer's home through a trust instrument in which the defendants served as both trustee and beneficiary of the trust and the consumer had no remaining control over the house -- except that they were still on the hook for the mortgage. “The defendants then ‘rented’ the house to someone with bad credit,” says Worley, “under the pretext that the consumer would be able to qualify for a loan after making timely payments. We've yet to see one of these deals actually work. “This seems to be a huge problem in North Carolina,” she says. XlV. OHIO: Scammers' mode of operation: Take a lot, do a little Taking large fees for doing little appears to be a popular mode of operation for foreclosure "rescue" scammers in Ohio, a state with one of the nation’s highest rates of homeowners in foreclosure. As we've seen throughout this report, letting foreclosure notices 34
DREAMS FORECLOSED: The Rampant Theft of Americans’ Homes Through Equity-stripping Foreclosure “Rescue” Scams languish, or dealing with them ineffectively, very often yields far worse results than simply doing nothing; it often runs out the clock on any chance to save the home Last October Attorney General Jim Petro filed suit against W.J.W. Enterprises Inc. and its owner, James J. Warsing, alleging violations of Ohio’s Consumer Sales Practices Act. A news release from Petro states: “Numerous consumer complaints allege that W.J.W. Enterprises and Warsing failed to deliver mortgage-foreclosure-prevention services and made continuous misrepresentations that consumers in foreclosure could save their homes using Warsing's W.J.W. Enterprises' services. “The sales pitch to consumers allegedly said that they (Warsing & W.J.W. Enterprises) could ‘save’ a consumer's home that was being foreclosed and halt the proceedings. Fees requested for this service ranged between $3,000 and $5,000.” Petro asked the court to enjoin the two firms from further deceptive business practices, to make them repay consumers' money lost on prevention services never received, and to impose civil penalties of $25,000 for each violation. The case remained in litigation as of late March. Assistant United States Bankruptcy Trustee Kristopher Aungst says the Trustee's office in Ohio has filed 57 "adversary complaints" against two firms involved in individual bankruptcy cases. Aungst says the firms, Foreclosure Solutions and H.R. Services, seek out people facing foreclosure, collect substantial fees from them for assistance in filing for bankruptcy, and then either fail to file proper paperwork or are filing papers "of very poor quality." This leaves the consumer without bankruptcy protection as well as poorer, since their cases are usually dismissed for lack of proper documents. Aungst says eight of the complaints against H.R. Services have been resolved as of mid- April, with the judge enjoining the firm from further bankruptcy work, ordering it to return all fees collected and tacking on fines in some cases. Mark Wiseman of the Cleveland group Housing Advocates tells of one foreclosure “rescue” case he’s handling where “the most outrageous part, so far, is that the company uses an attorney who signs the borrower to an agreement that says ‘I will file an answer on your behalf, but WILL NOT litigate the case in your defense.’ “Curiously, by having an attorney file an answer on your behalf and then ignore the case, you are worse off in Cleveland,” Wiseman says. That’s because time runs out on more meaningful solutions. Dayton attorney Chuck Roedersheimer says he’s seen two types of scams “which are major problems in Ohio” and the Dayton area. The first he describes as: 35
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DREAMS FORECLOSED: The Rampant Theft of Americans' Homes

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