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Mortgage and Foreclosure Relief Scams Still Prevalent

Federal Trade Commission Advises Consumers to Beware

Mortgage and Foreclosure Relief Scams Still PrevalentThere are few things more stressful than being behind on your mortgage or facing the possibility of foreclosure. Unfortunately, there are unethical people out there who want to take advantage of your anxiety and fears. Here are a few to watch out for:

  • The phony class action—In one high-profile fraud case, companies advertised that qualified consumers could join a class action mortgage fraud lawsuit against certain banks and lenders. The company initially said the cost would be limited to a one-time charge of $895. Victims were told they had a “strong case,” when most of the lawsuits were summarily dismissed. The victims also were convinced to send monthly payments even after the legal action was terminated. In many instances, no lawsuit was ever even brought on behalf of the victims.
  • The phony counseling or debt negotiation—Another common scam involves a company that promises, for a fee, to negotiate a deal with your lender either to reduce your payments or extend the term of your loan to make it more affordable. You may be asked to make payments to the company while the negotiation is in process. At some point, though, the company will disappear.
  • Rent-to-buy schemes—In this con, a company or individual encourages you to transfer title to your home as part of an arrangement that allows you to stay in your home, rent it from the company while you get your finances together, and then buy it back at a later date. The company promises you’ll get a better rate and better terms when it comes time to repurchase, but generally the opposite is true. You’ll find that you can’t afford the terms, and you no longer own your home. The scammer may even raise the rent to a level you can’t afford and then evict you. Or the con artist may promise to sell the house and give you a portion of the profits, but that won’t happen.
  • Bait-and-switch cons—In another scam, you receive a pile of documents to sign purportedly to refinance your home. Hidden in the legalese is a provision that conveys title to your home in exchange for a “rescue loan.”

Contact the Law Offices of David J. Karbasian, PC

Send us an e-mail today or call us at 856-667-4666 to schedule an appointment.

Evening and weekend meetings can be arranged upon request. We’ll come to your home or the hospital to meet with you, if necessary.

Beware of Potential Mortgage Loan Modification Scams

Consumers Should be Wary of Unauthorized Practices

Beware of Potential Mortgage Loan Modification Scams

According to the New Jersey Department of Banking and Insurance, consumers need to be careful when responding to advertisements or solicitations regarding loan modifications to avoid foreclosure. The state reports that a number of businesses have offered services to the public, and have frequently targeted attorneys, mortgage bankers and brokers to obtain referrals. They say that many of these companies may be operating without proper licensing from the state, and may take substantial up-front fees without providing any real benefit to the consumer.

The services can be marketed under a variety of terms, from “foreclosure prevention” to “loss mitigation consulting. The “loan modifications” offered by many of these companies are not second mortgages or loan refinances, but are considered under New Jersey law to be “debt adjustment.”

There are specific laws in New Jersey regarding what types of businesses can legally provide “debt adjustment” services through loan modification.” The lender or mortgage servicing company may legally do so, as may the owner of the loan. Any other party seeking to engage in debt adjustment through a loan modification must either be licensed by the Department of Banking and Insurance as a debt adjuster, or must be exempt under New Jersey’s Debt Adjuster Act. The following parties are generally exempt:

  • A lawyer licensed in New Jersey
  • An employee of the debtor whose duties include adjusting the employer’s debts
  • Anyone acting pursuant to an order or judgment from a court of law
  • A creditor of the debtor who makes debt adjustments without cost to the debtor
  • Any person who makes a debt adjustment for the debtor at the debtor’s request and without cost to the debtor

Contact Attorney David J. Karbasian

Contact our office online or call us at 856-667-4666 to schedule an appointment. Your first consultation is without cost or obligation. The sooner you call, the sooner you can move forward with your claim. We can accommodate evening or weekend meeting requests and will come to your home, if necessary.

Watch Out for These Mortgage Foreclosure Scams

mortgage-foreclosure

So you’ve been experiencing financial difficulties and you’re at risk of having your mortgage foreclosed. There seem to be many individuals and entities out there willing to help you avoid foreclosure, but you need to beware—many of them are outright frauds and will only make your situation worse. Here are some scams to avoid.

The Old “Bait and Switch”

With this strategy, a lender will promise to refinance your mortgage at an attractive rate, perhaps lowering interest rates or extending the length of the mortgage. Then, when you show up at the closing (after you’ve incurred expenses for title searches, surveys and inspections), the lender tells you that the original deal is off and offers you a new package, with much less favorable terms. Often, because of the money you’ve already spent and your fear of losing your home, you take the bait, so to speak, and sign on for more than you can afford.

Property Leasebacks

Under this scenario, a fraudster comes in and offers to pay your monthly mortgage payments and allow you to stay in your home. In exchange, all you have to do is deed your property over the fraudster and make monthly rental payments, which will include an amount supposedly allocated to buying back the property. Unfortunately, you have no guarantee that the party to whom you are making payments will actually use the rent to pay off the mortgage. Furthermore, if you couldn’t afford your previous mortgage payments, how do you expect to be able to pay an even higher monthly payment—the new payment will include the costs of your mortgage plus some interest income to the recipient.

Contact Us to Protect Your Rights

In the aftermath of a personal injury or consumer fraud, evidence can get lost and memories can fade. Don’t run the risk that you won’t be able to get full and fair compensation for your injuries. Contact our office online or call us at 856-667-4666 to arrange a meeting. Evening and weekend appointments can be set up by request. We’ll also come to your home or the hospital to meet with you, if necessary.

We handle all personal injury claims on a contingent fee basis. There won’t be any attorney fees unless we recover compensation for your losses.

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