Victims Of A Foreclosure "Rescue"

CBS News Shows How A Growing Scam Is Exploiting Homeowners In Foreclosure

(CBS)  The number of Americans struggling to pay their mortgages is higher than it's ever been before.

New data released Thursday shows that so far this year, there have been a total of 925,986 foreclosures filing nationwide — an increase of 56 percent from last year. But homeowners in distress could face a double whammy: A growing scam is exploiting people who are in foreclosure in a way that leaves them with nothing. Chief investigative correspondent Armen Keteyian shows how the scam works.

---

Annie Stephens, a 70-year-old grandmother, has lived in her Atlanta home for 40 years.

"I just don't feel like I belong anyplace else," Stephens said.

But after suffering a stroke, she found herself unable to work — and unable to pay her bills.

"Once you get behind, it's hard to catch up. Hard," Stephens said.

Within days of foreclosure, Stephens was overwhelmed with ads promising instant relief, an easy way out.

They proved anything but. She says a con artist claiming he'd help refinance her home instead stole it, then stripped away tens of thousands of dollars in equity.

"They're just no-good scamming vultures," Stephens said.

It's known as "foreclosure rescue" but a CBS News investigation has uncovered an unending trail of victims across the country.

As the number of foreclosures soars to record levels — up nearly 90 percent from this time last year — so does mortgage fraud. CBS News has learned the FBI currently has more than 1,100 cases pending; in 2003 that number was just 436.

Sources say the Metropolitan Money Store in Maryland was one of them.

When Keteyian knocked on the door there, it was apparent the place had been shut down.

"We have helped stop over 250 foreclosures and have refinanced thousands of homes," the company's radio ad says.

A major class action law suit now charges the Metropolitan Money Store of being "the single largest mortgage scam in Maryland history ... an elaborate scheme to dupe" more than 400 homeowners "of millions of dollars in lost equity."

State investigators describe the scheme as a classic come-on: a desperate homeowner buried in debt and facing foreclosure is convinced to transfer the deed of their home to a third-party investor with the promise of getting it back. Instead, the company sucks the equity out of the house, leaving the original owner in desperate straits.

One group says they were victims of the Maryland scheme.

"It’s an empty feeling. It feels like a bottomless pit," a member of the group told Keteyian

"Do you feel like you were cheated?" Keteyian asked.

"Absolutely. Out of our home and more," one said.

"They took the equity and make the credit worse than it was before," another explained.

"I think this is one most outrageous scams in the United States at this time," said Elizabeth Renuart of the National Consumer Law Center.

Renuart says such shady deals are skyrocketing as the mortgage market implodes. "Financial distress is the weakness that they exploit because people are so concerned about losing their homes they'll do almost anything to save them," she said.

Only seven states specifically regulate foreclosure rescues; only one, Massachusetts, makes it illegal.

In Maryland, CBS News wanted to talk to the people who allegedly ran the scheme.

Despite repeated attempts, CBS News was unable to reach Joy Jackson Fordham or her husband, Kurt Fordham, who is also implicated in the scheme. The only trace of them were photos of their $800,000 wedding last year. It was an over-the-top, Hollywood-style affair at which they gave away cash, a Porsche and — in a final insult to folks like those CBS News interviewed — a house.

"What?" one of the victims said.

Could it have been one of their houses?

"That was our wedding!" one woman said. "We didn’t get invited."

[feelfree1]

The housing situation is far more grave than we are being led to believe, and it is poised to get much, much worse.

Related-

July 12 (Bloomberg) %u2014 Mortgage foreclosures in the U.S. jumped to a record in the first half as rising interest rates and falling home prices battered homeowners.

Almost 926,000 foreclosure notices were filed, 56 percent more than a year earlier and the most since Irvine, California- based RealtyTrac started tracking the data in 2005. Foreclosures were the highest last month in California and Florida, where some home prices have fallen as much as 25 percent, and Ohio and Michigan, where the automotive industry fired more than 50,000 people in the past 10 years.

The jump in 30-year mortgage rates by more than a half a percentage point since May is putting a crimp on borrowers with the best credit just as a crackdown in subprime lending standards limits the pool of qualified buyers. Foreclosures also are increasing as the supply of unsold homes hit a record 4.43 million in May, according to the National Association of Realtors.

Worsening Slump

Homeowners are losing their property as the National Association of Realtors is forecasting the housing slump will persist into next year as builders curtail production. The group yesterday reduced its sales forecast for the seventh consecutive month and said existing home sales will fall 5.6 percent.

http://www.bloomberg.com/apps/news?pid=20601087&sid=afjq9WCz.Zy8&refer=home

[chinesespy]

there is no reason for most people to foreclose.quit blaming the system because your an idiot and cant do mathh..

monthly savings
get rid of the cell phone=75.00$
get rid of the internet=50.00$
take public transportation= 200.00$
and many other examples..
your a bunch of idiots

I'm glad my place is paid for

[stezzer]

chinesespy

Please don't call people idiots if you can't even spell, or put a dollar sign in the correct place.

Everyone has an hour of need. When yours comes around I hope people are as callous to you, as you are to others.

Learn some compassion Sir, it's what makes us human.

[johnshaft4]

Mortgage fraud was invented AND perfected by Cheney/Halliburton. These evil doers are diabolically clever.

[radiob-2009]

Learn some compassion Sir, it's what makes us human.
Posted by Stezzer

Well stated sir and a good evening to you.

[stezzer]

radiob

Good evening Sir, I hope you are well. I always look out for your comments, and have enjoyed your recent witty and acerbic observations.

I wish the time difference wasn't so vast and we could chat a little longer. However, once again I find myself having to say goodnight as it's 2.30 over here.

Please keep posting your comments radiob. I always look forward to your opinions, even if I have to catch up the following day.

[radiob-2009]

Posted by Stezzer

Thank you sir, have a nice evening.

[setumstrt9]

Let me guess. The democrats will want to raise taxes on the rich and payoff the mortgages of people who can't manage their finances.

It's the rich who are to blame, and they should be punished. They make too much money and pay their bills. Shame on the rich!!!!!!!!!

It's a terribly sad story, but they borrowed the money, and they made the bad decision.

[whatithink-2009]

setumstrt9,

Your post makes no sense. This is about mortgage fraud. Are you saying if people practise mortgage fraud and get rich, they should get away with it? Do you really have sympathy for someone who takes advantage of a 70 year old woman to get rich? Anyone for that matter? If so, you must also support bank robbers and Enron executives. This is no different.

[r-morris1981]

For links to foreclosure rescue stories from around the country, go to the blog The Home Equity Theft Reporter,, at

http://HomeEquityTheft.blogspot.com

and then click the link for Foreclosure Rescue Posts.

[radiob-2009]

It's a terribly sad story, but they borrowed the money, and they made the bad decision.
Posted by setumstrt9

Never hit a rough spot in the road? Lifes been peachy and has not thrown you any rocks? Is that what is required to occur to you in order for you to have empathy?

[barbaraf4]

This is terribly sad that a 70 year old woman would be a target; however, I suspect the elderly are primary targets for most scams.

If you are caught in a similar situation, find out what your rights and responsibilities are BEFORE you reach the deadline. Foreclosure doesn't come out of nowhere. You should know if your mortgage payment is behind. Take some positive premptive actions while you have time.

[bognak]

Being in the mortgage business and having had seen this type of thing done in several cases, I have to add to this report. When a person is in foreclosure, facing loosing their home and come begging for anyone to help them, as is often the case, they will find people who will bail them out. Yes they loose their equity but there are companies out there doing this type of bail out, they refinance the home as investment property, at a conforming rate, and the homeowner gets to stay in the home paying a lower payment than if they had been bailed them out. To bail someone out of foreclosure, which is almost impossible to do, the person would be paying a rate of over 12%. The company I know of doing this type of rescue gave the person two years to clean their credit, which the company helped with as part of the payment received, so they can repurchase the house. Then I have seen that person, yell they were cheated out of their equity, which would have been lost totally had the foreclosure sale happen. I am not saying that many of these rescue mortgages are not fraud, there probably are more that will take it all and make the person move, still there are a few that have helped people with this sort of rescue.

[paul hollern]

Your story never said what the fraud was. It appears the homeowner who went into foreclosure (which was there actions) then borrowed more money of which they couldn't pay back. I've helped many people with foreclosures and the story that almost aways crosses my desk is the willingness of the mortgage company to make overlevered loans and the borrower more than willing to take them. Thats the real problem.

[bognak]

The largest problem today that has caused the foreclosures being so high is the interest only ARMS that came out 5-6 years ago. Mortgage Brokers failed to stress that even though the very low rate of 2% was good for 2 years, it will rise at an alarming rate when the fixed period is up. As I predicted those rates jumped in some cases up to over 10%. Personally I feel the feds should be going after the brokers to make them more accountable to making sure people really understand what they are getting into.

[bennyblack1]

This is how it works. It is NOT a scam. It is an honorable business that is designed to do one of two things.

1) Provide instant relief by making the payment on the mortgage. In essence, this legally becomes a mortgage jointly owned. The back payment on the loan becomes a save, because it keeps the owner from getting a bad mark on the credit. In return, the owner agrees to make timely monthly payments for the duration of the back payment, until the back payment is paid off. The secondary owner makes the payments.

2)The buyer of the near foreclosure simply buys the home for the cost of the back due payment and the equity, if any. Many times, it is just for the back due payment. The buyer assumes the title, and the tenant moves out or pays rent to stay there.

It is a smaller, private 2nd mortgage in which the owner-in-joint provides. He has rights like anyone else, and can claim ownership of the property if the payments aren't made. People who enter into these agreements aren't stupid. The terms are clearly laid out, and the owner agrees to them. It's not stealing. This is a LEGAL transaction. I feel sorry for the woman, but she's calling it a scam because she wants to blame her mistake on someone else. This is another case of "I was stupid, now fix it!" I'm sorry, but if she couldn't make the payments, she should have sold the property, paid the mortgage, then invested in another smaller and cheaper home.

And CBS News, you should know better!

[bennyblack1]

This is how it works. It is NOT a scam. It is an honorable business that is designed to do one of two things.

1) Provide instant relief by making the payment on the mortgage. In essence, this legally becomes a mortgage jointly owned. The back payment on the loan becomes a save, because it keeps the owner from getting a bad mark on the credit. In return, the owner agrees to make timely monthly payments for the duration of the back payment, until the back payment is paid off. The secondary owner makes the payments.

2)The buyer of the near foreclosure simply buys the home for the cost of the back due payment and the equity, if any. Many times, it is just for the back due payment. The buyer assumes the title, and the tenant moves out or pays rent to stay there.

It is a smaller, private 2nd mortgage in which the owner-in-joint provides. He has rights like anyone else, and can claim ownership of the property if the payments aren't made. People who enter into these agreements aren't stupid. The terms are clearly laid out, and the owner agrees to them. It's not stealing. This is a LEGAL transaction. I feel sorry for the woman, but she's calling it a scam because she wants to blame her mistake on someone else. This is another case of "I was stupid, now fix it!" I'm sorry, but if she couldn't make the payments, she should have sold the property, paid the mortgage, then invested in another smaller and cheaper home.

And CBS News, you should know better!

[jb01201a]

Its Georgeie fault. I mean George Bush !

[whatithink-2009]

Gramto11,

Our economy may be healthy, but society is sick. These two posters are clear proof. Little do they know that their posts are more a reflection on them than anything else.

[bennyblack1]

Radiob;
I feel ya. However, I have hit rough spots in the road. I've had rocks thrown at me. But there is a difference between empathy and sympathy. I can be empathetic, but realize there is nothing that can be done. I can be sympathetic, take sides, agree...and try to help, but still know that there is nothing that can be done. The woman is looking for SYMPATHY. But, legally, there is nothing that can be done. She, in effect, legally QUIT-CLAIMED the deed to the joint owner, and changed the conditions of ownership. Now, I'm really trying not to be prejudice, here, but dog goned if I'm not seeing it again... a black, elderly, woman using her status as a minority to gain sympathy to change her disposition. Well, gee, I'm a white, disabled, US Veteran. Give me sympathy and change MY disposition. Buy back MY house free and clear, pay MY foreclosure free and clear. And gee, don't stop there! While you are at it, clear up my bad credit! My disposition is no different than hers. So, let's stop with the "Let's feel sorry for the little ol' black lady!"

[whatithink-2009]

Our government has been bailing out stupid things that rich people do for years (can someone say S&Ls). Many times the bailout happens when most people are unaware that it is happening (how many remember the bailout of LTCM)? However, the moment that poor people run into problems all of the empathy in the world evaporates. I don't understand how people can have more expectations of poor people than they do of rich people...I don't understand this from a supposed Christian nation. Unbelievable!

We need to start teaching empathy classes in school. Our nation's health could surely benefit.

[whatithink-2009]

bennyblack1 wrote:

"a black, elderly, woman using her status as a minority to gain sympathy to change her disposition."

You are OFFICIALLY an idiot REGARDLESS of RACE, AGE or GENDER!!

Where exactly did you see her saying this in the article or video? The only thing that I see is her being interviewed that shows that she is a black elderly woman.

STOP PLAYING THE RACE CARD, IDIOT!

[keithle1]

So many people are so gullible. It really is amazing what people fall for. Do NOT mess with your mortgage. What's more important than owning the place you live in. If it sounds too good to be true, it probably is.

[whatithink-2009]

bennyblack1 wrote:

"I'm really trying not to be prejudice."


Just because you say that you are not, does not mean that you are not. You are the only one who has made this into a race issue. When Paris Hilton was discussing how unfair she was being treated, did you turn it into a race issue? Should CBS only interview white people from now on? Would that make your "not trying to be prejudice" heart lighter?

[whatithink-2009]

benny "no empathy for old black women" black1,

If it makes you feel better white people are complaining about housing problems too (apparently you need to be reassured):

http://www.youtube.com/watch?v=10WoQZKZkNs

http://www.youtube.com/watch?v=SejeITkaOWc

[whatithink-2009]

The S & L Bailout: $32 billion every year for 30 years

[bennyblack1]

This is NOT what either Dr. Martin Luther King OR Malcom X wanted for black people. Both of these people preached personal responsibility. Dr. King was a preacher who was an advocate of education, Christianity, and self-discipline. Malcolm X was a preacher of a change of behavior, pride, education, and responsibility. Though Dr. King was talking to all, and Malcolm X was talking to black people, the message was still the same. Equality. Owning up. Walking straight. Taking responsibility. And not blaming the other guy for your mistakes. What you guys that are so angry don't realize is that it IS a race issue. If someone out of the kindness of his heart wants to give her a house, fine. She's on Social Security, no doubt. And if she lives in a reasonable, decent home for one person, her bills will not be too much for that. But, let's not call this honorable practice a scam just because she says it is. And don't change the laws. We are a free country. We make our own decisions, good or bad. We pay for our mistakes. People like her are wittling away at our freedoms.

[bennyblack1]

Well, I made my mistakes. But, you don't see me going on CBS News trying to get people to fix them for me. Understand that I have been almost homeless, I have lost a house. I have been denied work. But, even though I am highly qualified for these jobs that I'm applying for, my credit alone disqualifies me. Now, I could make a big stink, and try to make companies change their policies to hire folks like me that have had it rough, but being that this is a free country, and that we do make our own decisions, and that we do pay for our mistakes, even if I was to be successful, I would take the freedom of the companies to set policies in place that would protect them. It ticks me off, but it wouldn't be America if they didn't have the right to run their businesses the way they see fit. It is lawful for them to have high standards for employment. Just as it is lawful for this lady to have her house legally and rightfully taken from her. She entered into the agreement. She couldn't make the payments. She knew what she was doing.

[whatithink-2009]

bennyblack1,

You are again an idiot. And you know what? Because you immediately blame somebody without knowing all of the facts. No, it is no illegal to be a plumber. But, it is illegal to be a plumber who takes advantage of older people who are living alone by getting them to pay for work that is not needed. It is a sign of our society when we fail to protect the young and the old. Is this the first time that you've heard of con artists taking advantage of the elderly - either black or white - because unlike YOU, the race does not matter to me!! Idiot!!

[whatithink-2009]

This IS a race issue...in YOUR HEAD!

[bennyblack1]

He wasn't a con-artist. He simply made his living from buying houses in the same fashion all over the country. People like these are all over Texas, Colorado, California, and the rest of the United States. The WHOLE story is, she should have sold the house, paid the mortgage, and either rented or invested in another house with a smaller house payment. Millions have done it. Why couldn't she have done the same thing? But, no, she let it go. She ignored the danger signs. It's not like she was overseas trusting her spouse with her finances like I was. I have an excuse, and I still don't get a break. Why, exactly, should she? The mean and horrible fact is that she's 70 years old. She doesn't NEED a big house with a big house payment. She needs a small house with a small house payment. Or, she can get a reverse mortgage, and not have to make a payment. Her estate will pay it upon her death. My mother was 75 years old, saw the danger signs, and sold her house, and has since been living on the same $100,000 on that sale, with which she invested in a condo, sold it, then invested in a house, and is now living comfortably with a $230 house payment. She owns her car, pays the bills, and eats quite well. She only has 800 a month, SS combined with retirement and health insurance. Why couldn't she have done that?

[bennyblack1]

And she can still rent. Now, if she didn't apply for Social Security, well, again, she's over 67 years old. Why didn't she?

[bennyblack1]

oh, and when Paris Hilton was being treated "unfairly," I turned it into a stuck up, rich, snotty nosed brat having a tantrum. She's another one, using status for special treatment. She has NO excuse whatsoever. She's got millions. No college degree. A business partner running amuck with no responsibility, using her beauty to get by. Is it me being prejudice, or reasonably upset? The old Proverb goes, "A beautiful woman with no discretion is like putting ruby earrings on a pig's snout." And the pig uses his snout to root around in the mud.

[zootallures2]

"The number of Americans struggling to pay their mortgages is higher than it's ever been before."

Then how can unemployment be down, retail sales up, and all the rest of the great economic news be true at the same time?

And what about the scam CBS is involved in? The whole nation really. How did building 7 fall? She lost her house? Iraqis and Afghans are losing their lives. Well, you are victims of your own moral-less system!

[ringading3]

Some people want to be "victims" so the con artist realtor and con artist mortgage broker "enable" people to buy who should never buy in the first place. It is *** expensive to buy a house, maintain it, insure it and keep it. Some people will never have the smarts to do this and they should never buy.

[nyckate]

zootallures2 - people are losing their homes because they weren't sophisticated enough to understand the mortgages they were obgliating themselves for and thieves always take advantage of those people - good decent hard working mostly blue collar workers.

And yet these are the same people that Bush wants to have invest their own social security??

I have always felt and feel more strongly that a better educated, better informed American is the best thing for the nation - then not only would we NOT have a guy named Bush in teh white house )even as the janitor!) but people might be more adept at their own finances. THe likes of sob george is supposed to look out for these working class people -- yet another job he failed the nation on.

Also, yaboos like Hannity and Rush keep preaching that the economy is GREAT - GREAT and GREAT. Yeah it is - if you are a hughly paid executive or a trust fund kid like George is - for the ordinary american prices of everything keep going up and salary rises are not going up at same rate.

[tnt1954]

that's one thing about the land of opportunity.
you have opportunity to get wealthy, but also
you have the opportunity to lose every dime,
end up homeless, and even go to prison.
singing the blues? ya gotta plenty of company.
when i think i'm a sap, i think of a us marine
who got shot through the head, while bending
down to pick up a kid who just got shot through
the arm. communist always say when they
take over a country to the rich who suddenly
'lose' everything, just like you told us
for years and years, life ain't fair. oh
yes, turnabout is fair play. or is it?

[tnt1954]

sad sob stories i could tell by the zillions.
right now, one of my 40 x wives is a sad
sob story, but keeping her head above water.
both her brothers were murdered. her husband
was murdered, but the authorities ruled it
a suicide. her dad is dead, her mom was
conservatorized by crooked relatives who
took all her money and gypped her daughter.
she lives in her car, and comes by to see
me now that all her fairweather goodtime
charlies have left her. i give her some
cash for food and gas and for her cellphone
so she can get art customers and dates, out
of my disability check. i just go without,
or shop real cheap. is there a reward for
that? not really. i just couldn't live with
myself if i was a cold blooded mackerel.
there are sad sob stories nowadays like that to fill
all of sea world with fish.

[oakishpines]

i knew an old one once what slept with guns afraid to leave the house and afraid to stay in it, paying t.v. preachets to keep god on her side tho she had a war hero child in law. she deserved a society to bus her around and shower her with food and medicine and spaces all ocver to rest and epic quests to cure common deaths.

folk should rally around get well soon feed the world sick beds instead of around get sicdk soon tax the world flags and bibles.

crossing the ocean or walking on the moon or swimming to pluto is relatively easy: having the faith that one may do so is the far more challenging step.

to look upon an infinite number of worlds is to glance, to seek out the infinite number of world still left unseen is to stare.

imagination is infinity with an infinite exponent.

if one shares just a handful of thoughts or other dances or other bouquets each day with a slitely more large handful of folk and some of those folk tip: a minimum wage income may not be too far away

[ramos937]

The only ones who should suffer from this subprime mess are the lenders. When I borrow from my bank, they require sufficient proof that I can pay back the loan. If I cannot, while it is a stain on my credit record, they suffer the loss as they should if I submitted good documentation. That is the way it should be with the mortgage lenders. They have lending guidelines established by law and by their industry. If they violate those, then they should be ones suffering the loss not the borrowers.

When I borrowed to buy my house a while back, I had to prove I could pay back the loan which I did.

[whatithink-2009]

bennyblack1,

You have still failed to explain to me how you can turn this into a race issue and not turn Paris Hilton's issue into a race issue. How can one be old whining black woman and the other not be young whining white woman? The only reason I can tell is that if you use white, you will be including yourself and we know you don't want to do this because you are so perfect.

The fact is that the minute a black person brings race into the topic, you are the first to harp on someone playing the race card. Yet, you find it completely okay to bring race into the topic. You do not see the hypocrisy in yourself??

[whatithink-2009]

markjessup,

Some should be learning who think that racism is dead that it is surely not...thanks to your post.

This is the really problem with racism. It prevents people from having empathy with another human being. That is a tragedy for humanity.

[truthspeake2]

To ALL the racist knuckle-dragging inbreds here, your world is getting smaller and smaller each and every day!

[bennyblack1]

Whatithink;
Well, you still don't know the difference between empathy and sympathy. I have loads of empathy. I have so much empathy for her that I pity her, which is a lower form of empathy. That means, that you just look at the person and shake your head while walking on by. You still can't do anything about it. I just don't have sympathy for her. She had ample opportunities to do the right thing. She KNEW long before hand what was going to happen, and she wasn't proactive. She was going to lose the house one way or the other. If it was a matter of pride, memories, and emotional attachment, still, I've learned that you don't let those things get in the way of making good decisions. I'm sure that she was warned.
And, Paris Hilton, yes, is just as bad.
Oh, and by the way, if you're gonna fight for this lady, then by God you'd better fight for me.

[bennyblack1]

speaketruth2

Knuckle dragging inbred? I'm a Germanic-Polish Indian Jew.

[bennyblack1]

whatithink
The more you talk, the more of what you think sounds crazy. Wake up, smell the coffee, and look around you. If you knew me, you would know that I'm a struggling Christian that would be the first to tell you that I'm "not all that." I would also be the first to tell you Christian principles about borrowing and loaning money. I would also be the first to tell you that God expects his people to plan, work the plan, and finish the plan. He also expects them to know when the plan will fail, and bail. I will be the first to tell you that you DO NOT invest in something that is unprofitable, you DO NOT borrow what you cannot pay back, you DO NOT loan money to people you know will not pay you back. You DO NOT give away money if you cannot pay your own bills and feed yourself after you have given. You simply take care of yourself FIRST, then if you have to give after, do so. The church had me so screwed up for the longest time, but now I know the truth. God commands that we first and foremost take care of ourselves. This lady did not take care of herself.

[whatithink-2009]

bennyblack1,

You profess to be a Christian but you would be the first person to call Jesus a deadbeat!! Have you ever wondered why God came back as someone poor instead of someone rich?

[bennyblack1]

And let me add, that since I wasn't taught properly early in life, that everyone else should come before me, I'm in this hole I can't dig myself out of. It's too late for me, and I just can't expect anyone else to fix it. It's gonna take me until death to fix it, and if it isn't fixed, society will pay for the church's erroneous doctrines. I can't only say, at this junction, return to the Bible. It's the only thing you can trust to tell you the truth.

[whatithink-2009]

bennyblack1 wrote: "This lady did not take care of herself."

- This woman is 70 years old and had a major illness. Have you no shame???