As home values across the USA continue to slide, law enforcement officials are saying that a new breed of swindler is preying on homeowners desperate to avoid foreclosure.
Until recently, defrauders tried to swindle homeowners out of their equity. Now, with that equity often dried up, they are presenting themselves as “foreclosure rescue companies” charging illegal advance fees to modify loans but often do nothing to stave off foreclosure.
The US Federal Trade Commission brought lawsuits last year against five companies representing 20,000 consumers, and state and local prosecutors have brought more. In Florida, Attorney General recently sued a company that had more than 600 victims. “There’s no way for the consumer to sort out the legitimate companies,” the Florida Attorney General, who added that he had limited resources to fight the fraud.
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