Asian Journal- The Filipino-American Community Newspaper

IN the current foreclosure crisis, predators are on a feeding frenzy on desperate homeowners needing help. I have heard a lot of horror stories from people telling me how they have become victims of these unscrupulous scam artists. These scam artists use outright lies in taking your money and promising services that are never delivered.

If you have received a Notice of Default, this means that the lender has commenced formal foreclosure proceedings. Because these foreclosure listings are readily available to anyone who wants to sell you their services, don’t be surprised if your mailbox gets flooded with offers of assistance. Here are some of the scams I’ve seen which are being perpetrated against unsuspecting homeowners desperate for a solution:

Phony Counseling- This is where the scam artist tells you that he can negotiate a deal with your lender and that there is nothing to worry about as long as you let the "negotiator" handle all the details. After charging you a huge fee upfront, you are told not to contact your lender, lawyer or credit counselor. Once you pay the fee, the scam artist simply disappears with your money.

Rent-to-Buy scheme- This is the type of scam where you are told to turn over the title of your home as part of an agreement that allows you to remain in your home as a renter, and a promise that you can buy your house back after a few years. You are told that this is necessary so that someone with better credit can take over your property and refinance your existing loan and avoid foreclosure. Oftentimes, however, the terms of the agreement are so burdensome that buying the property back is impossible. In a lot of cases also, the loan is never refinanced. Thus, you simply end up paying "rent" to stay in your own home! Someone who came to my office recently for help became a victim of this scam. He was told to pay "rent" for six months ($2000 per month) but the property was never saved and still went into foreclosure.

Bankruptcy Fraud- This one, in my opinion, is the worst of all scams. Recently, a couple came to me for help after falling for this scam. This is where the scam artist promises to negotiate with your lender to stop the foreclosure if you pay a fee up front. Instead of contacting your lender, however, they file a bankruptcy in your name without your knowledge. The documents filed often contain false information about you and your situation which but since they are filed in your name, could make you susceptible to being charged with bankruptcy fraud.

In California (and most states have similar laws that protect consumers), once you are in foreclosure, anyone who offers to save your home, stop or postpone foreclosure, forbear, reinstate or extend your loan must do the following: (1) provide you a written agreement which outlines the services being performed; (2) allow you to cancel the contract within 3 days after you sign it; (3) They cannot accept or demand money from you up front. Fees can only be collected after services outlined in your agreement have been performed; (4) They cannot ask or demand you to transfer title to them or anyone else; (5) They cannot ask or demand you to give them a Power Of Attorney. Attorneys are exempt from the above requirements if services are provided as part of their law practice. Licensed real estate brokers and agents are exempt ONLY if they are listing your home for sale or if they are arranging a new loan on your property and are NOT accepting any money up front before providing services. (California Civil Code 2945.1(b)(3)C).

I am not saying that every offer of assistance is fraudulent. There are legitimate individuals and companies out there who provide assistance in compliance with the law. But to avoid becoming a victim, get legitimate help by hiring a qualified and knowledgeable attorney who can advise you of your legal rights. For a free office consultation, call Toll-Free 1-866-477-7772. We have offices in Glendale, Cerritos and West Covina.

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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped over 4,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1-866-477-7772). (Advertising Supplement)