One of the reasons for the millions of homeowners homeless due to foreclosure is predatory lending practices. These were perpetrated by both mortgage lenders and servicers who did not care about the homeowners at all but were only concerned about their commission. To make matters worse, the same homeowners are now becoming victims to fraudulent mortgage rescue operations.
For this reason, local governments have been doubling their efforts in exposing and punishing these scam artists. In California, the Attorney General Office has recently arrested three individuals who were involved in collecting upfront fees in exchange for stopping foreclosure. As expected, the distressed properties ended up in foreclosure.
Working as a group, the three individuals worked under fake foreclosure rescue companies named Foreclosure Prevention Services and First Gov. They contacted hundreds of distressed homeowners, with offers of providing them mortgage assistance by reducing their monthly mortgage payments and even re-finance their existing mortgage in exchange for an upfront fee. Said fee ranges anywhere between $1,500 and $5,000.
Unfortunately, such too-good-to-be-true offer is sadly fraudulent as indicated in the complaint filed against these unscrupulous people. After receiving the payment from the homeowner, the group would advise the troubled borrowers to cease all communication with their lenders and stop paying their mortgages.
Victims of this foreclosure rescue operation eventually noticed that the default notices and foreclosure warnings were still coming and when they asked First Gov, they were told that their loans were still being re-negotiated. To add injury to the salt, the group will once again ask them to pay another fee to the Resolution or Reinstatement Department.
The complaint filed against the group includes 39-counts of money laundering, conspiracy and grand theft. It also indicated that the group collected around $700,000 from troubled California homeowners under the fake foreclosure rescue scheme.
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