News Release 2008-55 | May 16, 2008
OCC Offers Consumer Tips to Avoid Foreclosure Rescue Scams
WASHINGTON — The Office of the Comptroller of the Currency issued an advisory today that provides advice to help prevent borrowers from becoming victims of foreclosure rescue scams.
"Foreclosure rescue con artists take advantage of vulnerable people who have fallen behind on their mortgages and may be facing foreclosure," said Comptroller of the Currency John Dugan. "People facing difficulties with their mortgages should contact their lender – or a legitimate financial counselor – sooner rather than later. Lenders are often in the best position to help by identifying options or modifying the loan, especially if the borrower is current on the loan or not seriously late on payments."
The OCC Consumer Advisory outlines what people should watch out for to avoid foreclosure rescue scams and provides a list of resources people can use to find qualified sources for help.
Most foreclosure rescue scams fall within three categories. In lease-back or repurchase scams, the con artist convinces borrowers to sign over their deeds in return for a promise to lease back or eventually repurchase the property. Refinance fraud involves a situation where the borrower believes the transaction is a refinance, but in fact the fraud involves transfer of property ownership to the con artist. Bankruptcy schemes involve repeat bankruptcy filings to get a temporary stay order to delay foreclosure, but can result in damaging the consumers’ credit without saving their homes.