Distressed homeowners should be wary of foreclosure scams

Purchasing a home is an achievement that many Connecticut residents cherish. For some, a home purchase is the culmination of years of planning, and the end result is a property where children are raised, milestones are reached and memories are built. When financial troubles arise, the risk of losing their home to foreclosure can lead people to do many things that they might otherwise avoid. That can leave them at risk of scams, of which there are many.

One such scam has led to prison sentences for three men. The three were part of Star Reliable Mortgage, a company that claimed to offer assistance to homeowners who were facing foreclosure. Clients of Star Mortgage were told that in exchange for upfront fees, they would be able to own their homes “free and clear.” Many paid between $2,500 and $4,500 for the company’s services.

What they received was of questionable worth. Company workers simply went to county offices and filed fraudulent documents connected to the client’s mortgages. Those documents made it look as though the properties had different trustees than were originally listed. This process is known as “clouding the title” and acts to delay the foreclosure process.

One of the men was convicted on charges of conspiracy and mail fraud. The other two pleaded guilty to conspiracy to commit mail fraud. The resulting prison sentences ranged from more than two and a half years to nine years.

This story should serve as a warning to Connecticut residents who are concerned about losing their homes. There are a number of legitimate programs to assist homeowners who are in distress. Upfront fees should be a red flag, however, of a probable scam. In many cases, the best path out of foreclosure and back toward financial stability is a Chapter 13 bankruptcy, which is an option that deserves consideration.

Source: recorderonline.com, “Three sentenced in foreclosure rescue scam“, July 26, 2017