Maryland regulators and others say the upswing in problems tracks the flooding of neighborhoods with windshield fliers and signs on telephone poles advertising rescue services. The signs are showing up "in poorer neighborhoods all over the place," said Stephen Prozeralik, director of enforcement for Maryland's Department of Labor, Licensing and Regulation (DLLR).
Real estate fever is adding fuel to the fire, said Benjamin Diehl, a deputy attorney general in California: "What feeds the scams is all of the information on TV and in newspapers about how to get rich in real estate."
Idriis Bilaal points to pictures of his family in the 100-year-old house in Northeast Washington where he was born. He has filed suit claiming he and two other D.C. homeowners were duped into selling their homes.
(Len Spoden For The Washington Post)
|
Forearmed Before Foreclosure
AARP lawyer James T. Sugarman says "there are dozens of ways to save your house from foreclosure" but that those in desperate times too frequently jump at bad deals.
His rule of thumb is, "Never do business with anyone who comes to your door or calls you out of the blue or sends you a flier. It's so bad out there that you can't afford to trust a stranger."
If you're facing foreclosure:
• Look into renegotiating the loan with the lender or working out a repayment plan.
• If you can afford it, get a lawyer from the local bar association referral program or a lawyer recommended by a trusted friend to help fight the foreclosure. If you have a low income, contact the local legal services network.
• Contact a government-approved housing counselor. Counselors are listed by state at www.hud.gov, the Web site for the Department of Housing and Urban Development.
• File a Chapter 13 bankruptcy to reorganize your debts. That will stop a foreclosure. But you must keep up the mortgage payments during reorganization. Be sure you get a reputable bankruptcy lawyer. (Some con artists offer to file bankruptcy petitions for a homeowner but never file the appropriate follow-up paperwork.)
• If you suspect the lender won't agree to cooperate or has included abusive terms, contact the local licensing regulator, consumer protection agency or federal banking regulators.
If you think you have been scammed:
• Any D.C. resident who is over 60, living on a low income and suspects a rescue scam can contact AARP's Legal Counsel for the Elderly at 202-434-2120.
• Contact HUD's National Servicing Center at 888-297-8685. The center refers callers alleging scams to local authorities and HUD-approved agencies, as well as the Better Business Bureau.
• Seek a temporary restraining order in your state (or D.C.) court.
Before the foreclosure notice comes:
• Elderly homeowners on fixed incomes can apply for reverse mortgages, the kind for which you draw money against the equity in your house for as long as you live rather than having to pay a mortgage. Such loans are fairly complicated, but certified housing counselors are very familiar with them. AARP's Web site offers information at www.aarp.org/revmort, and the Federal Trade Commission has advice at www.ftc.gov/bcp/conline/pubs/homes/rms.htm.
And finally:
• If you go through all the steps and you hear repeatedly that the best thing to do is to sell the house to a legitimate buyer, don't resist.
-- Sandra Fleishman
|
| |
|
Minnesota passed a tough law to deter scammers earlier this year after a series of complaints, including allegations that one company had defrauded about 250 homeowners.
State Attorney General Mike Hatch (D) lobbied for the legislation because he says the problem is "huge . . . and way underreported. . . . We're talking millions and millions of dollars of damage."
Regulators in New Jersey, California, Pennsylvania, Ohio and Utah are all pursuing civil complaints against companies they claim have defrauded consumers.
Advocates and regulators say that the nation's criminal prosecutors are not yet responding because these cases are complicated and because defrauded homeowners often don't realize they've lost title until it's too late -- when they get an eviction notice from the new owners. Landlord-tenant courts, however, typically don't allow a challenge to an eviction on the grounds of disputed ownership unless the tenant pays the landlord monthly and posts a bond, money that the onetime homeowner often doesn't have.
Maryland regulatory officials say the situation demands more attention.
"I hate to use the word 'epidemic'; we're relatively new," said Prozeralik, who was hired as director of enforcement for Maryland's DLLR this spring. But the office has investigated five cases of alleged rescue fraud since summer and issued a consumer alert in the fall.
"To me, five cases is five cases too many. It indicates a serious problem," he said.
The suit that AARP's lawyers filed on behalf of Bilaal, Meads and Willie King, a third D.C. homeowner, claims that Abell, Baltimore and five others conspired to "deceive" the homeowners, who thought they were getting loans to save their homes, into signing away the titles, and that, in return, the homeowners "got a fraction of the value of their homes."
