For con men, there’s no place like (your) home
by Joe Volz / Copley News Service
Charlene Trane, 78, lived in a home she owned free and clear of debt in San Fernando, Calif.
But her developmentally disabled son lost several jobs and needed help financially. So, she took out a $100,000 mortgage on her house, which was worth around $350,000 or more.
Subsequently she ran into her own medical expenses, including large monthly drug costs. Before long, she fell behind in her mortgage payments and received a foreclosure notice from her mortgage company.
In a panic, Trane didn’t know what to do. When three strangers visited her at home and offered to help her with her mortgage payment difficulties, she was more than ready to listen.
Trane agreed to the men’s terms, signing over her deed to the three men and receiving in return an assurance that they would pay off her mortgage, which was in her name. She also received about $11,000 and a used car.
“I wasn’t thinking straight,” Trane says now. “I was so down and out I felt like I was a hundred years old.”
Trane was a victim of unscrupulous salespeople who prey on vulnerable people, reports “Dreams Foreclosed,” a newly published report from the National Consumer Law Center, based in Boston. She is one of thousands and thousands of Americans who are finding themselves falling behind in their mortgage payments and then being bilked of their homes’ equity.
Often the smooth-talking salespeople target the elderly, the sick or minorities, who can least fend for themselves.
Echoed by many others around the country, a Colorado attorney general says in the report, “We absolutely experience a problem here.” The attorneys general expect the housing scams to increase in the coming months as the interest rates go up.
In many communities, the number of foreclosures is rising as well.
The massive increase in the value of houses in many areas of the country has led to many homeowners turning to their home equity to help them when they need money. Some have refinanced twice annually. Perhaps they want to pay off their credit card debt. Or they want to finance home repairs. Or put a down payment on a retirement home for themselves.
Then, when an emergency arises such as an illness or a job loss, they may find themselves faced with onerous mortgage payments and not enough income to pay the monthly amount.
That’s when scam artists strike. Sometimes they offer the worried homeowner help for huge fees or high interest rates. Or they mask the real terms the owner is agreeing to by burying them in a massive amount of paperwork.
Other times they ask that the house deed be signed over to them while the homeowner becomes a renter, paying an amount that is somewhat less then the original mortgage payment.
The carrot here is that the owner can buy his or her home back later. But “later” never arrives.
In many instances, the wrongdoers get away free and clear. Most “go either completely unexposed or unpunished” because homeowners don’t realize that they have been taken or they don’t know how to find help before they lose their homes, the report says.
So what can homeowners or their families do if they have received an eviction notice?
- Be vigilant. If a sales representative offers to help you with your mortgage payment but requires a fee upfront, say “no” and show the person to the door.
- Stay in touch with your mortgage company or a lawyer. The scam salespeople often advise you not to contact your mortgage company. But, often, mortgage companies will help owners in trouble work out a new schedule of payments when the equity in your home has increased significantly.
- Don’t sign anything with blank spaces on it. They can be filled in later with terms you never agreed to.
- Don’t fall for a promise such as, “We’ll save your credit.”
So what happened to Charlene Trane?
Before her home could be sold at foreclosure, a legal aid lawyer contacted her. To date, the lawyer has succeeded in eliminating the foreclosure threat, paying the back mortgage payments and returning to Trane the fees she had paid.
Contact the National Consumer Law Center at 77 Summer St., 10th Floor, Boston, MA 02110, by phone at (617) 542-8010 or on the Web at www.nclc.org.