Federal grand jury charges 11 for foreclosure help scams

On Behalf of | Apr 2, 2019 | Foreclosure

The prospect of losing a home might feel like too much to bear for some Connecticut homeowners. However, foreclosure is not always a given. Many homeowners find success by negotiating with their lenders to modify their loans, and some can even benefit from methods such as short sales. Unfortunately, there are some individuals that try to take advantage of homeowners who are going through difficult periods in their lives.

In a recent indictment, 11 individuals across five different states were charged by a federal grand jury for allegedly scheming to defraud homeowners. These individuals supposedly promised to negotiate with lenders on behalf of homeowners facing foreclosure. These were apparently phony promises, and the organizations purposely targeted financially insecure homeowners through public court records and various online databases.

The scheme utilized multilevel marketing techniques. Affiliates were recruited to get distressed homeowners to pay for services that would help protect their homes from foreclosure. Those affiliates were promised commissions for doing so successfully. According to prosecutors, these organizations did not conduct any negotiations or successfully remove any mortgage liens, perform any short sales or obtain lower mortgages. This means that homeowners forked out money for services that they never actually received.

These schemes targeted homeowners who were already in difficult financial straits, likely making their problems even worse than before. Rather than relying on promises that seem too good to be true, most homeowners in Connecticut can find success through methods that have been proven to work in the past. These include negotiating directly with lenders or even filing for bankruptcy to stop foreclosure efforts.