FORECLOSURE SCAMS

Renate Brevard was scammed twice. First by the bogus agency that promised to help repair her credit so that she could refinance her mortgage. Then by the lawyer she hired to help her stave off the foreclosure that eventually claimed her home.

The problems all started for Brevard, 47 (pictured left with her granddaughter), when she refinanced the three-bedroom, 2.5-bath rambler in New Carrollton, Md., that she had owned since 2001. When her new adjustable rate mortgage reset from just under $1,100 per month to about $1,500, the accounting specialist fell behind on her mortgage payments. By 2007, she was struggling to hold onto the home, where she lived with her granddaughter, her teen-age son and a daughter.

"People in those situations are vulnerable, and the scammers are always a step ahead," says Ed Jacob, executive director at the Neighborhood Housing Services of Chicago, which provides housing counseling to homeowners struggling with mortgage payments. "The sad truth is that Ms. Brevard's story is not unique," says Marietta Rodriguez, director for homeownership and lending at NeighborWorks America. "With the national foreclosure rate persistently high, more and more homeowners are falling victim to scammers who are openly taking advantage of individuals in difficult circumstances."

Brevard learned the hard way how scammers can take advantage of desperate homeowners. Here's her advice to help others detect foreclosure rescue scams so that they don't become victims, too:


1. Avoid businesses that advertise with fliers or solicit door-to-door
After falling behind in her payments, Brevard received a flier in the mail from something called "the New Start Program."

"It said they'd help you improve your credit so you can qualify for a lower interest rate loan," she told AOL Real Estate. "They said they would act on my behalf so that I would not be in jeopardy of losing my home."

Brevard contacted the agency, which seemed legitimate to her because it did not charge any fees for its services. Now she regrets that decision. "Anything that comes in the mail, I would make sure it is a state-approved program or one through the actual bank itself," she says.

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2. Know what you're signing
The agency asked Brevard to sign a statement authorizing it to talk to her lender about a new payment plan. What she didn't realize was that by signing the paperwork, she was also signing over the deed to her house.

Such "bait-and-switch" tactics are favorites of housing scam artists, who might say you're signing documents for a new loan to make your payments more affordable, when in reality they're documents that surrender the title of your house in exchange for a "rescue" loan.

Don't let a counselor pressure you to sign paperwork you haven't had a chance to read through carefully or that you don't understand. Also, don't sign any blank forms or let the counselor fill out forms for you. Be sure to talk with a state board licensed attorney before signing anything that transfers the title of your home to another party.


3. Be wary of the rent-to-buy scheme
Counselors she never met told Brevard they would lower her payments so she could clean up her credit history and later qualify for a refinance. Although her monthly payments were lowered to $1,100, she was sending payments to the scam artists, not to her lender. In effect, she was renting from them because they had refinanced her loan and held the deed.

Be wary of any program that asks you to surrender the title or deed as part of a deal to remain in your own home as a renter, even if it "guarantees" you can buy the home back in a few years. Scammers may tell you that surrendering the title will permit a borrower with a better credit rating to secure new financing to prevent the loss of the home, but buying back your home often becomes impossible. In a worst-case scenario, the new borrower walks off with your money, defaults on the loan, and you get evicted.


4. Work only with a HUD-approved counselor
After about two years of making the reduced payments to the New Start program, Brevard became suspicious and consulted a lawyer, who discovered that the counselors were not-HUD approved and that she'd fallen victim to a scam.

If you are approached by foreclosure counselors--by mail, phone, or in person--make sure the counseling agency you deal with is on the Department of Housing and Urban Development's list of approved agencies, or call 877-HUD-1515 for more information.

Most HUD-approved housing counselors provide no-cost counseling services and many more provide low-cost counseling, but they will not charge hefty upfront fees. Do not agree to work with a counselor who collects a fee before providing you with any services or who accepts payment only by cashier's check or wire transfer.


5. Hire licensed attorneys
Brevard hired an attorney to represent her to help her recover her funds and regain the deed to her home. She paid him a total of about $14,000 over a period of months to file documents and represent her in court. Court officials later told her that he never appeared in court on her behalf, never filed any documents, and in fact didn't even have a current license to practice law, as he had been disbarred before he took her on as a client.

"Here I am thinking he was taking care of the legal part of it, and one day I was here at work and my neighbor called me crying. All my stuff was in the front lawn. The bank had foreclosed and I had no idea that was happening," Brevard says.

When choosing a real estate attorney or other lawyer, check with your state bar association to see if the person is currently licensed to practice in your state or if there are any pending investigations. Be prepared to attend your court hearings, even if you have a lawyer representing you. Get a copy of your court file number so you can retrieve copies of documents at the courthouse or check on the status of a case online. Most states and counties maintain a public database that is accessible via the Internet.

"You think if you're getting a lawyer you're getting adequate representation, but you have to also check the lawyers out. You have to really do your homework," Brevard says.


6. If it sounds too good to be true, it probably is
Your foreclosure process is public information, and once the process is started, scam artists can pull information from databases that include the name of your lender, how much you owe and in some cases even the account number on your loan. All a savvy scammer needs to do is call you up quoting this information and claim to be acting on behalf of your bank. Make sure you keep track of the person's name, telephone number and an employee ID number, then call your lender from a number on your mortgage statement to verify if the person is legitimate.

"It's important for homeowners to know that what may look like a miracle may very well be a scam," says NeighborWorks' Rodriguez. "Knowledge is the best defense against this illegal activity, which is why it's critical that homeowners take advantage of the informational resources available to them from trusted sources."


7. If you're scammed

If you feel you may be the victim of foreclosure fraud, trust your instincts and seek help. For more tips on spotting scam artists, visit the Federal Trade Commission's webpage on foreclosure rescue scams. NeighborWorks' Loan Modification Scam Alert campaign also has a website, http://www.loanscamalert.org/, where homeowners can find tips and contact information for trusted resources in their area.

The bright spot for Brevard is she was able to recover the money she lost to the lawyer from a state program called the Client Protection Fund of the Bar of Maryland, and although she lost her home and all her equity, the foreclosure did not show up on her credit report because the deed had been transferred and the scammers had refinanced the mortgage out of her name. She now rents a home near her former one so that her son can finish high school with his friends

HOME AFFORDABLE PROGRAMS FALL SHORT

By Brady Dennis

Washington Post Staff Writer
Tuesday, December 14, 2010; 1:29 AM

The Treasury Department's primary foreclosure-prevention program has failed to live up to expectations and has suffered from a lack of "meaningful goals," according to a report from a congressional watchdog panel due out Tuesday.

The government's Home Affordable Modification Program, or HAMP, is on pace to prevent 700,000 to 800,000 foreclosures - a significant figure, but far fewer than the 3 million to 4 million struggling homeowners Treasury officials originally hoped to help, according to the bipartisan Congressional Oversight Panel.
"This has turned out to be a lot more complicated and a lot harder" than expected, the panel's chairman, Sen. Ted Kaufman (D-Del.), told reporters. He said he didn't consider HAMP a "failure" because it had helped many homeowners, but he added, "I think the program has just turned out to be smaller and has had a lot less impact" than anticipated.
The panel's report cites various reasons that HAMP has fallen woefully short of expectations, namely conflicting incentives within the mortgage industry.
For instance, although homeowners and their lenders often would benefit from modifying existing loans, companies that service those loans sometimes reap bigger financial gains with foreclosures. Treasury's efforts to encourage more servicers to modify loans by offering them payments have fallen short, the panel said, "in part because servicers were not required to participate."
Another factor is that many borrowers hold a second mortgage from lenders that stand to gain from blocking modifications to the first mortgage. "For these reasons and many others," the report states, "HAMP's straightforward plan to encourage modifications has proven ineffective in practice."
The panel also criticizes Treasury for failing to collect more data about HAMP, not setting more meaningful goals by which to measure the program's progress and failing to hold mortgage servicers accountable for repeatedly losing paperwork or resisting modifications.
Tim Massad, Treasury's acting assistant secretary for financial stability, called the report's criticisms "somewhat unfair" in a conference call with reporters Monday evening.
"This program has had many critics, and there have obviously been many criticisms of it, but I think it's important to recognize what it has accomplished," he said, noting that HAMP so far has aided half a million troubled homeowners. "That's a lot of people. We shouldn't discount that."

In addition, Massad said that the standards put in place by Treasury have set a model for the private industry, where the number of modifications far outpaces those completed through HAMP. Massad also noted that other government-backed efforts, such as those undertaken by the Federal Housing Administration and mortgage giants Fannie Mae and Freddie Mac, have resulted in additional modifications.
Massad said Treasury officials had tried to walk a fine line, structuring HAMP in a way that helped as many homeowners as possible while avoiding unnecessarily wasting taxpayer dollars and modifications that would result in redefaults. "I certainly acknowledge there are a lot of challenges and a lot of difficulties in doing that," he said.
Still, the oversight panel report states that HAMP modifications on average offer "more relief to the borrower" and have "a lower likelihood of redefault" than proprietary modifications.
Massad said the agency would continue to focus on fixing problems plaguing the mortgage-servicing industry, which has been overwhelmed by the housing crisis, and he added that "we may very well withhold or claw back payments in the future" if servicers fail to live up to the requirements of the program.
HAMP has helped about 500,000 homeowners, but oversight panel members lamented that the expiration of the government's bailout program this fall means that Treasury missed an opportunity to revamp the program to reach more of them.
"The ability to do any major modifications to the program has been lost," Kaufman said. The panel estimated that Treasury would spend only about $4 billion of the nearly $30 billion originally set aside for HAMP.
Still, the report urges Treasury to take other steps to decrease foreclosures. Among its recommendations: Flagging HAMP delinquencies early in order to prevent redefaults, as well as allowing borrowers to apply for loan modifications online.
Even so, the panel's report states, "An untold number of borrowers may go without help - all because Treasury failed to acknowledge HAMP's shortcomings in time."

FLORIDA 2ND IN FORECLOSURES DESPITE DECLINE IN OCT.

 

Foreclosure filings down 4 percent from September; rate still 2^nd highest

Foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 56,858 Florida properties in October, a 4 percent decrease from the previous month, but still up 10 percent from the level reported in October 2009, according to the latest RealtyTrac^® U.S. Foreclosure Market Report.

One in every 155 Florida housing units received a foreclosure filing in October, maintaining the state’s status as the second highest foreclosure rate in the nation.

“Florida foreclosure activity fell slightly in October, though it remained well above the level reported for this time last year, leaving the state among the worst-affected in the nation,” said James J. Saccacio, chief executive officer of RealtyTrac. “With unemployment at 12 percent, far above the national average, the state’s foreclosure woes are likely to continue into 2011.”

California remained in first place, reporting 66,475 properties with foreclosure filings in October. Michigan maintained its third place ranking for the third consecutive month, reporting 19,288 properties with foreclosure filings for the month. Illinois moved up two spots to rank the fourth highest foreclosure total, tallying 16,969 properties with foreclosure filings, narrowly beating out fifth place Arizona, which moved down one spot reporting 16,538 properties with foreclosure filings for the month.

The remaining states in the nation’s foreclosure top 10 for October were Georgia (14,850), Nevada (14,205), Ohio (13,233), Texas (13,008) and Washington (6,346). The nation’s top 10 accounted for 72 percent of all foreclosure filings in the nation for the month.

Palm Beach County posts state’s top foreclosure rate for October

Palm Beach County posted the highest county foreclosure rate in Florida for the month, with one in every 94 housing units receiving a foreclosure filing during October — 4.2 times the national average. Lee County registered the second highest foreclosure rate, with one in every 96 housing units receiving a foreclosure filing during the month — 4.1 times the national average. Osceola County was third highest, with one in every 105 housing units receiving a foreclosure filing — 3.7 times the national average.

Broward County led the state in foreclosure activity in October

Broward County had the top foreclosure total, reporting 7,324 properties with foreclosure filings for the month. Palm Beach County tallied the second highest foreclosure level, reporting 6,851 properties with foreclosure filings. Third highest total was in Miami-Dade County, where 5,786 properties with foreclosure filings were reported. Fourth highest was Hillsborough County, where 4,485 properties with foreclosure filings were reported. Orange County had the fifth highest total, reporting 4,257 properties with foreclosure filings.

State remains the second largest contributor to nation’s monthly foreclosure total

Florida accounted for 17 percent of the 332,172 properties with foreclosure filings reported nationwide in October. Total U.S. activity decreased by more than 4 percent from the previous month, and was down fractionally from the level reported in October 2009. One in every 389 U.S. housing units received a foreclosure filing during the month.

County	NOD	LIS	NTS	NFS	REO	Total	1/every X HU (rate)	% Chg Sept 10	% Chg Oct 09
United States	43,271	57,304	92,989	45,372	93,236	332,172	389	-4.39	-0.04
Florida	0	22,556	0	20,868	13,434	56,858	155	-4.46	9.53
Broward	0	2,891	0	2,883	1,550	7,324	110	4.64	7.75
Palm Beach	0	1,958	0	3,236	1,657	6,851	94	-23.39	104.51
Miami-Dade	0	3,218	0	828	1,740	5,786	169	-12.57	-25.26
Hillsborough	0	1,549	0	2,247	689	4,485	116	39.29	47.10
Orange	0	1,310	0	1,961	986	4,257	108	-1.64	-6.54

FORECLOSURE - WHAT THIS MEANS FOR RENTERS' RIGHTS

Renters now have legal rights against eviction due to foreclosure, but not necessarily housing security.

New laws give renters a reasonable 90-day notice of foreclosure eviction and, in most cases, protect their lease agreement. However, both of these safeguards still can be circumvented.

While the foreclosure laws (which took effect May 2009 and expire Dec. 31, 2012) look good on paper, Columbia, S.C., real estate lawyer Fred Shipley warns renters, "Most landlords facing financial trouble will not send a foreclosure notice to their tenants but will continue to collect rent instead."

While banks are supposed to honor a legal lease on a foreclosed property, renters should be aware that:

• There's no law that prevents the bank from re-selling the foreclosure.
• A new owner would not have to honor the lease if he or she intended to live in the property.
• A lease does not have to be honored if the rent is below fair-market value or the tenants are related to the owner in default.

So how can renters protect themselves, especially when 1 in 348 homes is in foreclosure?
Our industry experts explain smart, practical moves that renters can take to protect themselves from foreclosure before and after signing a lease. Here's their advice on how to either avoid a foreclosed property or negotiate to stay in one:

1. Search county records. "If you're looking for a rental, make sure the property is not in pre-foreclosure." says Lynn Madison, a short sale and foreclosure resource specialist for the National Association of Realtors. She advises renters to check property records at the County Clerk's office before signing a lease.

2. Request mortgage statements. Madison, who also specializes in risk management, suggests that renters evaluate a landlord's financial stability as well. "Ask to see recent mortgage statements or receipts for the rental property," says Madison. "You want proof that the owner is current on payments." Imagine searching for an apartment, moving, unpacking and then having to start that whole process over just six months later because the property went into foreclosure.

3. Record your lease. To make sure that legal notices are received in the event a rental property goes into pre-foreclosure, Shipley advises renters to record their lease with the county office. "It costs about $10 to do and guarantees that the county will mail legal notices to the address on the lease." By doing this, renters are no longer dependent on the landlord to disclose foreclosure notices.

4. Initiate contact. "If the home you're renting is in foreclosure," says Shipley, "don't just sit there if you want to stay in the place, be proactive." He advises tenants to reach out to the bank or lawyer involved in the foreclosure. "Let them know you have a good payment history and have taken care of the property and would like to stay." Instead of reselling the property immediately, which could terminate the lease with a live-in buyer, the bank may be persuaded to rent. "We are starting to see banks working with tenants," Morgan confirms. She, too, believes tenants must work with the banks to achieve their best outcome.

5. Become an asset. Banks can and will advertise good tenants to attract real estate investors. In these situations, renters are a valuable asset, offering stability and minimizing the investment risk. In a recent property transaction handled by Shipley's firm, the tenants were the reason the property sold so quickly. "The buyer felt so good about the way the tenants had taken care of the place; that was one of the main reasons the investor purchased that property over other options."

6. Investigate "cash for keys." If the bank intends to vacate the property and re-list it on the market, a representative or the bank's real estate agent may offer "cash for keys," a legal way to pay tenants to leave by a certain date. The offer also requires tenants to legally release all rights to the property and claims against the bank. A good deal for the renter would cover basic moving expenses and any lost security deposit. (Also see "Get Your Apartment Rental Deposit Back.")

7. Check state and local laws. The "Protecting Tenants at Foreclosure Act of 2009" states that local foreclosure-tenant laws take precedence over federal laws when the local laws provide better protection to tenants. Be sure to look up state and local laws for your area.

If renters find themselves in a hostile situation or unable to resolve a foreclosure eviction matter, they should contact the agent initially involved with the lease, a real estate lawyer or the National Law Center on Homelessness and Poverty.