Tags: Deceptive | Lawyers | Struggling | Homeowners

Deceptive Lawyers Preying on Struggling Homeowners

By    |   Monday, 09 Jun 2014 10:43 PM

The U.S. foreclosure epidemic has ebbed, but preying on struggling homeowners is still a thriving business, with lawyers acting as some of the most vicious new predators, says the Huffington Post.

A growing number of struggling homeowners are becoming targets for foreclosure rescue scammers.

The scammers typically demand large, upfront cash payments and advise homeowners to stop paying their mortgages, explains the Pittsburgh Courier.

Editor's Note: 18.79% Annual Returns ... for Life?

The most costly of the foreclosure rescue scams — and now the most pervasive — involve or are directed by attorneys, according to an analysis, by the Lawyers’ Committee for Civil Rights Under Law, says the Huffington Post.

The Lawyers’ Committee for Civil Rights Under Law, which operates the HOPE hotline, a resource for struggling homeowners, says nearly 60 percent of all complaint calls last year involved a lawyer, up from 40 percent in 2010.

The average loss victims claimed in schemes involving or directed by lawyers was $3,601 — about $800 more than in other types of deceptions, the group reported.

A common tactic lawyers use is recruiting homeowners to participate in “mass joinder” lawsuits that will allegedly force banks to stop foreclosures and cut loan balances. The lawyers often promise homeowners will be able to walk away with the title to their home, free and clear of any debt, all within a matter of months, says the Huffington Post.

In reality, the claims are bogus. Such lawsuits require extensive research and generally take years to settle. The Federal Trade Commission warns that promises of rapid results are a definite red flag.

One former employee of a law firm specializing in foreclosure rescue explained that she quit after a client said she was living on oatmeal just to afford the legal fees for the bogus services.

“I was told to lie again and again,” Michele Stephens told the Huffington Post.

She explained that she used a script to solicit clients, promising to make them whole. The homeowners who agreed paid fees upfront, which were used to fund lawsuits. But the documents the firm filed lacked even the most basic elements required for a lawsuit, and soon the cases were getting thrown out of court.

“It was all a load of crap,” said Stephens who is now being investigated by the New Mexico Supreme Court Disciplinary Board for allegedly practicing without a license.

Homeowners must be vigilant because the FBI ranks mortgage fraud as a low priority, allowing such problems to fester, says the Huffington Post.

Meanwhile, the number of victims is on the rise.

Last year, the U.S. Government Accountability Office reported over 40,000 complaints of foreclosure fraud occurred nationwide, totaling losses of more than $90 million, says the Pittsburgh Courier.

Each year from 2010 through 2012, more than 18,000 foreclosure fraud complaints were filed beyond the 9,000 complaints received in 2009.

Editor's Note: 18.79% Annual Returns ... for Life?

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The U.S. foreclosure epidemic has ebbed, but preying on struggling homeowners is still a thriving business, with lawyers acting as some of the most vicious new predators, says the Huffington Post.
Deceptive, Lawyers, Struggling, Homeowners
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2014-43-09
Monday, 09 Jun 2014 10:43 PM
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