Homeowners Warned about New Mortgage Fraud Schemes
The U.S. GAO (General Accounting Office) has just released a report on the newest forms of mortgage fraud. Requested by Rep. Doris Matsui of Sacramento, the new frauds are a variation of the foreclosure fraud schemes in which fraudsters demanded upfront fees and performed little or no work on behalf of the consumer. Attorney General Edmund G. Brown has been aggressively prosecuting licensed agents, attorneys and others who broke the law, with the result that some have been sentenced to prison and fined and some have lost their real estate licenses or the right to practice the law.
The GAO has identified the two new scams as:
(1) a “forensic” loan audit, in which the borrower pays an upfront fee to the “auditor” (someone who is usually NOT an auditor) to see if their were regulatory violations in the original mortgage. The auditor tells the borrower s/he can get the loan modified or even canceled.
(2) the “consultant” promises to get the borrower’s mortgage erased based on a far-fetched notion that the government will pick up the loan due to the lender having done something illegal during the loan origination process.
Read the full article in the Sacramento Business Journal.
