Foreclosure Rescue Fraud Epidemic Highlighted in New Report

April 18, 2014
National Mortgage Professional Magazine 
mortgage lending news
The Lawyers' Committee for Civil Rights Under Law has issued a new report that looks at trends in foreclosure rescue fraud and efforts to combat the problem.

The paper, whose release coincides with national Fair Housing Month, noted that scam operations usually demand sizable upfront payments from distressed homeowners but afterwards do little or nothing to help them land a mortgage workout. Lawyers' Committee also calculated an average loss of $3,248 per fraud victim and confirmed that nearly two-thirds of complainants were targeted by an out-of-state scam. Minority borrowers also were disproportionately impacted, according to the report.

"Homeowners facing difficult financial circumstances are desperate to find help to keep their homes [and] are vulnerable to high-pressure sales pitches and false guarantees of success made by individuals and companies posing as loan modification specialists," said Yolanda McGill of Lawyers' Committee's Loan Modification Scam Prevention Network. "African-American and Latino homeowners, already victimized by targeted predatory lending, have been victimized by scams at disproportionate rates compared to their percentage of the population. Senior homeowners also are victimized at high rates and their average loss is higher than other groups."

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