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November 22, 2014

Foreclosure Scams on the Rise

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Foreclosure Scams on the Rise

The number of foreclosure-rescue scams are on the rise and will likely exceed 2011 numbers, according to the Treasury Department’s Financial Crimes Enforcement Network. These scams target struggling home owners and these so-called rescuers promise they will save the home owner from foreclosure by negotiating — for a fee — a loan modification on their behalf or selling their home to investors. In some cases, the home owner not only loses money as a result of these schemes but also the title to their home, FinCen reports. 

FinCen announced that foreclosure-related scams will likely exceed the 2,782 reported in all of 2011. In just the first half of 2012, 2,360 foreclosure-related scams had already been reported.

FinCen officials suspect that a growing public awareness of foreclosure scams is what’s behind the increase in reporting. 

The Department of Justice announced this week a crackdown on foreclosure-rescue scams with the arrest of more than 500 people accused of conducting such scams, allegedly leading to about $1 billion in losses. 

While the number of foreclosure scams is on the rise, overall mortgage fraud is falling, dropping 41 percent at the beginning of this year compared to 2011, FinCen reports. 

Source: “Foreclosure-Rescue Scams on the Rise: FinCen,” HousingWire (Oct. 9, 2012)