Dec. 27, 2008
For Desperate Homeowners, Scams Abound
CBS Evening News: How A Company Promising Help Cost One Woman Her American Dream
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Play CBS Video Video Foreclosure Rescue Fraud As the foreclosure crisis continues to detriment many Americans, even more could now lose their homes due to a phony rescue loan company. Bill Whitaker reports from Woodland Hills, California.
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(AP / file)
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In-Depth Q&A: Mortgage Help New plan to allow lenders to alter delinquent loans more quickly.
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E-MAIL US Home In Peril? Let Us Help! Are you in danger of losing your home -- facing foreclosure? Ray Martin wants to hear from you. He may offer you guidance in our "Hitting Home Early" series. E-mail him!
Alexendria Craig's house is full of memories. It was her parents' home and she inherited it when they died. A picture of her great grandfather sits on the mantle.
Now she is about to lose that home after taking out a series of high interest loans that have left her hopelessly in debt. She says the loans "helped balance out what [she] was short" on payments.
Her salary as a paralegal for Los Angeles County was not enough to make ends meet. Desperate to hold onto her house, she answered a slick sounding ad that turned out to be too good to be true.
Craig agreed to pay $30,000 and to share title on her house to a foreclosure rescue company. The company said it would use equity in her house to pay off her debts, and that her credit would be repaired. After a year she thought she'd get her house back.
The company's agreement promises that clients have "sufficient equity in your home" for "paying off debt liability," "repairing your current credit," and most importantly that they'll "remain in your home without further concerns or worries."
It's a classic foreclosure rescue scam, says attorney Debra Zimmerman.
"There should be a huge red flag for anybody who offers to do this for money, because there is no reason to pay for help," said Zimmerman, of Bet Tzedek Legal Services. "Loan modifications can be done for free."
Avoiding Foreclosure
Free assistance for homeowners facing foreclosure is available from Hope Now. Visit www.hopenow.com or call 888-995-HOPE to talk to a counselor for free.
In the typical scam, the homeowner transfers title to a third party who promises to secure a lower interest rate on the mortgage. But what often happens is the third party cashes out the home's equity, leaving the homeowner as a renter.
"This is the American dream, and they're losing it. And somebody is coming and they're going to rescue them," Zimmerman said. "[The scam] is very, very appealing."
In California so many people have fallen for these scams the attorney general has issued a consumer alert.
Bbut that warning came too late for Alexandria Craig. Her house is in foreclosure, and next week she's facing eviction. Both the foreclosure rescue company and the bank foreclosing on her house deny any wrongdoing.
"You feel like you're drowning and you feel like there's nobody sending you a life raft," said Craig, sobbing.
Barring a miracle, Craig says she'll be moving into her car on next week, losing family memories and her American dream.
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Add a Comment See all 43 Comments
- Solarrays247..
Thank you and good luck to you as well. Have a great 2009. - Reply to this comment
- Solarrays247...
You are trying too hard. Your posts reveal your true fears and inadequacies. I can smell your urge to brag about about false success.
I repeat, the majority of those facing foreclosures brought it on themselves via greed and stupidity. The scamming element is inconsequential. Very few fall prey to the "scumbag" mortgage brokers you refer to.
So happy for you and all your wisdom regarding the real estate market.
I have posted no untruths, nor ignorant remarks, while you resort to petty accusations and engage in self adoration. How sad.
Posted by drivelphobe at 10:28 PM : Dec 28, 2008
No, my opinions are from experience over many years in the financial markets. I''m not trying to prove anything. You can continue to believe whatever you want! It is people like you that oftentimes have the most to learn. Good luck. - Reply to this comment
- Solarrays247...
You are trying too hard. Your posts reveal your true fears and inadequacies. I can smell your urge to brag about about false success.
I repeat, the majority of those facing foreclosures brought it on themselves via greed and stupidity. The scamming element is inconsequential. Very few fall prey to the "scumbag" mortgage brokers you refer to.
So happy for you and all your wisdom regarding the real estate market.
I have posted no untruths, nor ignorant remarks, while you resort to petty accusations and engage in self adoration. How sad. - Reply to this comment
- With her being a paralegal, I would think she would have known better.
Posted by FLSunJnky at 03:06 PM : Dec 28, 2008
Yes, you might think so, but I don''t believe anyone is immune to falling for a scam. For examples, you only need to look at some of the headlines over the last couple weeks. - Reply to this comment
- With her being a paralegal, I would think she would have known better.
- Reply to this comment
- Solarrays247..
Sorry about your financial condition and your foreclosure situation. I forgive you for being so angry and making such petty accusations.
Posted by drivelphobe at 01:21 AM : Dec 28, 2008
And what gave you the idea that I was experiencing any financial difficulty? Because I am standing up for others who are not as fortunate as I am? Your login name is quite appropriate, and says it all! - Reply to this comment
- Solarrays247..
Sorry about your financial condition and your foreclosure situation. I forgive you for being so angry and making such petty accusations.
Posted by drivelphobe at 01:21 AM : Dec 28, 2008
Boy! Have you barked up the wrong tree! I have been buying properties since 1974, and there is not much that you can tell me that I don''t already know.
This current financial fiasco can only be attributed to creed and corruption. You can paint any other color on it that you wish!
I don''t have to worry about my situation. But I still consider myself a part of humanity. And I learned some great lessons of humility and compassion from some wealthy and wise relatives when I was quite young. And I''m so glad for that! It can''t be much fun living a life such as yours! How lonely you must be to be the only perfect human around! - Reply to this comment
- For those folks who keep on displacing their anger on the people who are losing their homes, besides my argument for compassion, I urge everyone to think about how your neighbors foreclosure is affecting the economy at large. Whether next door or further away, the foreclosures en masse are and will continue to act as a heavy weight on the economy and maybe more importantly, on the collective psyche of the nation which in large part drives our economy, our expectations, and ultimately our actions.
Instead of easily passing judgment on those who are victims, perpetrators or just those less-than-financially-capable individuals looking for relief from the daily grind, it would be in all our interests to help as much as possible. For the homeowners looking to avoid being scammed, here is a good place to start doing your research: http://preventingforeclosure.org (specifically the article on how to avoid being scammed http://preventingforeclosure.org/2008/10/beware-of-foreclosure-rescue-scams/)
We call ourselves adults and all that this word invokes, but ironically not even children would treat each other the way we do sometimes. - Reply to this comment
- For those folks who keep on displacing their anger on the people who are losing their homes, besides my argument for compassion, I urge everyone to think about how your neighbors foreclosure is affecting the economy at large. Whether next door or further away, the foreclosures en masse are and will continue to act as a heavy weight on the economy and maybe more importantly, on the collective psyche of the nation which in large part drives our economy, our expectations, and ultimately our actions.
Instead of easily passing judgment on those who are victims, perpetrators or just those less-than-financially-capable individuals looking for relief from the daily grind, it would be in all our interests to help as much as possible. For the homeowners looking to avoid being scammed, here is a good place to start doing your research: http://preventingforeclosure.org (specifically the article on how to avoid being scammed http://preventingforeclosure.org/2008/10/beware-of-foreclosure-rescue-scams/)
We call ourselves adults and all that this word invokes, but ironically not even children would treat each other the way we do sometimes. - Reply to this comment
- I can see why some people will believe some this slick people...those of you who are above scams, or so believe you have not met the right one yet.
The key is never do anything legal without an attorney...your attorney no theirs.
A law could be passed that any change of title or loans have to have approval from the an attorney representing the person and you solve the problem.
Posted by lee2261 at 06:57 AM : Dec 28, 2008
Yep, great advice. I made that promise to myself after I purchased my first home in 1974. Although I was lucky and came out okay on that purchase, I saw enough at that closing/settlement table to know that I would always have an attorney with me on any future purchases! And that is the advice I have always given to anyone who came to me for help! - Reply to this comment
- Deregulation was just another word for legalizing scamming.
Phil Gramm was the Head of this Massive ripoff scheme.
And we''''re paying the price right now!
Posted by jerr11 at 12:43 PM : Dec 28, 2008
Yep! Good point, jerr11. And accurate! - Reply to this comment
- I left the business because of scumbags out to snare the public. There are still some decent people in the mortgage business.
Posted by Solarrays247 at 11:44 PM : Dec 27, 2008
And I bet that you never told a lie to get a bigger commission or slid a little shaft into someone when they were not looking.
Posted by d7767w at 02:07 PM : Dec 28, 2008
Absolutely not!!!! If you would take the time to learn your profession, and know your product, and have some pride in your own integrity and honesty....the scamming is not necessary to be successful!
Why? Are you one of those scumbags that can only be successful by being one of those (to quote you) "lie to get a bigger commission or slid a little shaft into someone when they were not looking"?
You are a great example of the mindset that has penetrated our society, and has led to this horrible financial fiasco.
Enough said....I can only look to our young people now to get this country back on the right track...that is those young people who are lucky enough not to have losers like you as parents. - Reply to this comment
- "Craig agreed to pay $30,000 and"
She couldnt have been in THAT bad shape if she had $30,000 to hand over!! - Reply to this comment
- Deregulation was just another word for legalizing scamming.
Phil Gramm was the Head of this Massive ripoff scheme.
And we''re paying the price right now! - Reply to this comment
- Vc,
Regardless of how stupid some individuals have been, the scammers are still the evil step-children. When these scammers are caught and convicted, they should be sentenced to fifteen to twenty years at HARD LABOR!
Then the next would be scammer just might think twice before taking advantage of others. - Reply to this comment
- Nobody should feel sorry for this woman. She is, afterall, a paralegal. She inherited this home. I''m assuming she must have recieved the home with a free and clear title. Then probably borrowed a bunch of money against it. And then she couldn''t afford to pay it. I think it is so sad our government wants to give people help with their mortgage. If it sounds to good to be true it is. You can''t get in over your head, do wrong and then get rewarded for it. What is happening to our country?! People -- pay yourself first. Stop giving your hard earned money away to these monsters. Don''t use credit cards UNLESS you pay the entire balance every month.
- Reply to this comment
- "Bbut that warning came too late for . . . "
". . . Craig says she''ll be moving into her car on next week . . . "
It would appear that a new scam is afoot. A "company" offers editor services to news outlets, collects an unknown sum of money for it and then outsources it to illiterate children in developing nations. The victim in this scam winds up with typos, spelling errors and poor grammar in most of their articles.
CBS News has obviously been taken. - Reply to this comment
- I cannot even believe that I typed week instead of weak. Next time, I should have coffee before posting.
- Reply to this comment
- No matter how desperate someone is, no matter how deep their debt, they should not be allowed to enter into a contract until someone with common sense takes a look at the proposed contract. This person needs to be a third party, unbiased and completely unknown to the two parties. Yeah, I know, good luck with that. It''s the truth though. The strong will always prey upon the week. I truly do not know how those people live with themselves, but, unlike many of us, they don''t have a conscience. I like money as much as the next guy, but I don''t have the right to take it from others in a deceptive manner.
- Reply to this comment
- If anyone takes out a loan on a home and is more than 25% of there net pay they may be headed for trouble
- Reply to this comment
