Fighting Foreclosure Fraud
Starting October 1, rules on the purchase of repossessed homes will be tightened in accordance to a new legislation that has been passed in order to curb the rising incidence of foreclosure fraud.
Among the states that will benefit from this new law are Florida, Nevada and Michigan. According to the Mortgage Bankers Association, Florida has held the top spot in mortgage fraud since 2006. Ironically, these states also have the highest foreclosure rates in the entire country.
Just this March, Florida recorded a whopping increase of about 115 percent in mortgage fraud reports compared to last year. Such high number naturally alarmed local officials and eventually spurned the federal government into action.
Most victims of these frauds are homeowners who are very desperate to stop foreclosure and will believe anyone who offers assistance. Experts consider the lack of information as another reason why the incidence of mortgage fraud has risen. A homeowner who has no idea about what is happening will likely fall victim to these foreclosure frauds.
For instance, these foreclosure fraud operators approach distressed homeowners and offer them some type of assistance in exchange for a small amount. Considering that these unscrupulous individuals are offering an easy way out of foreclosure, most of these troubled homeowners give in and pay the said fee. Once paid, they will never hear from these smooth operators again.
There are also cases when homeowners are asked to sign over their home’s deed in exchange for stopping foreclosure and paying off their mortgage debt. The scam artists even convince the owners that they can by back their homes after some period of time. Of course, all these are just lies.
Knowledge is actually power in situations like these and arming yourself with the right information will help you avoid these scams.
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