Home Foreclosure Rescue Scams Rise

US Administration announced they have raised their efforts to stop predatory mortgage relief companies preying on struggling homeowners looking for companies to help negotiate better mortgage terms that yield a more affordable home loan payment. As the mortgage crisis continues to unfold, the FBI says incidents of suspicious financial activity banks reported to the bureau has skyrocketed, jumping from 28,000 cases in 2005 to 48,000 last year. Among the factors fueling this two-year, 71% increase is a spike in modification and sub-prime loan scams targeting citizens facing foreclosure, one of which is known as the “home foreclosure rescue scam.”

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It’s a common to hear stories about foreclosure relief fraud, according to state and federal authorities, as well as homeowners interviewed by ABC News. In the scheme, predatory mortgage brokers promise financially distressed homeowners a lifeline, but it’s a ruse. Sometimes they charge a fee and then disappear. And sometimes they push homeowners over the cliff into financial ruin. With more than two million Americans facing the possibility of foreclosure, authorities say so-called home foreclosure prevention scams.

Foreclosure News reported the FBI contends they are presently involved in many of home foreclosure prevention investigations with over 2,100 mortgage fraud cases, which reports suggest is up 400% from the previous five years. U.S. Authorities say con artists are using the Internet, mailings and television to prey on homeowners facing financial ruin in the mortgage crisis. Jackie Felton, chief of the FBI’s Economic Crimes Unit, acknowledges that “everyone wants to be a homeowner,” but that when those homeowners start to fall behind in loan payments, they become vulnerable. “And when these fraudsters come in and they take advantage of those people who are in crisis mode, it’s very disturbing,” she said. “It’s unfortunate at that time when you are in crisis mode, most of us panic and that’s the worst time to actually try to make a decision,” she added.

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