Real Estate Fraud
With foreclosures on the rise, criminals are taking advantage of struggling homeowners by committing fraud. Many appear to be legitimate consultants or brokers, but their schemes are aimed at stealing your money or property. If you believe that you've been a victim of a criminal foreclosure consultant or other real estate fraud, call the San Diego District Attorney's Real Estate Fraud Complaint Line to request a complaint form. Although this office cannot legally represent individuals in civil matters, help cancel any debt due on a signed contract, resolve or mediate individual contractual complaints, or obtain any other personal relief, we will pursue these criminals and prosecute them as the law allows. We do recommend the Housing Opportunities Collaborative for foreclosure counseling or assistance with loans. If you have already transferred title to your property, you should consult with private counsel to explore the legal solutions available. If you do not have an attorney, you can contact the San Diego County Bar Referral Service and they will help you find a qualified attorney for your case.
Foreclosure Rescue Scams
The predominant foreclosure "rescue" scams generally come in three varieties:
- Title Transfer
The most dangerous scheme is the "bailout" that never quite works. This scenario includes various schemes in which the homeowner surrenders title to the house in the belief that within the deal, they'll be able to remain in the home as a renter, and eventually buy it back. Homeowners are sometimes told that surrendering title is necessary so that someone with a better credit rating can secure new financing to prevent the loss of the home. But the terms of these deals are almost invariably so onerous that the buyback becomes impossible, the homeowner loses possession permanently, and the "rescuers" end up with all or most of the home's equity, often evicting the original homeowner. Another scam convinces the homeowner to transfer title to a "federal land grant" with the false promise that this prevents the lender from foreclosing.
- Bait And Switch
In the bait-and-switch scheme, the homeowner does not realize they are surrendering ownership of the house in exchange for a "rescue." Many homeowners later insist that they believed they were only signing documents for a new loan to make the mortgage current. This also results in the homeowner losing their home.
- Phantom Help
The third scheme could be called "phantom help" since the "rescuer" charges outrageous fees, either for light-duty phone calls and paperwork the homeowner could have easily performed, or on a promise of more robust representation that never materializes. In either event the homeowner is usually left without enough assistance to actually save the home but with little or no time left to prevent this grievous loss by the time it's realized. The "rescuer" essentially abandons the homeowner to a fate that might have been prevented with better intervention.