Foreclosure fraud is as old as mortgage foreclosure system. To get rid of foreclosure fraud, National Consumer Law Foundation published a 68-page report on the incidents they investigated in every state of the union. And the Federal Bureau of investigation recently published its Mortgage Fraud Report for 2006 shows the recent statistics, which suggests that, the increasing foreclosures give criminals the chance to exploit and cheat defenseless homeowners looking for financial guidance.

The perpetrators convince homeowners that they can save their homes from foreclosure through deed transfers and the payment of upfront fees. This “foreclosure rescue” often involves a manipulated deed process that results in the preparation of fake deeds. In intense cases, perpetrators may sell the home or secure a second loan without the homeowners’ knowledge, pull down the property’s equity for personal enrichment. While foreclosure scams differ, they may be used in combination with other fake plans.

One can only think how poor it is now and how much poorer it is likely to become as more and more homeowners are or are likely to be unable to make their monthly payments.

Last month the Attorney General of Ohio Marc Dan filed lawsuits against six companies, accusing that they had made fake promises to keep homes safe from foreclosure. He said that every accused may have dishonored at least five different consumer protection laws and has issued a warning to the companies who think they can get away by exploiting and taking away homes from the families.

Mr. Dan also warned homeowners to be very careful and beware of people who promise to avoid your foreclosure against certain fee.

The Massachusetts Governor Mr. Deval Patrick urged the state to propose some legal help to the homeowners those who are facing foreclosure including a new hot line and appointments to reputable financial counselors and to break down on all the aspects of mortgage fraud.

The Governor also said that the homeowners who are delinquent on their mortgages are not being wise and mature at all. Foreclosures are not done silently or confidentially, and the embarrassment factor can be an important motivator to grasp at straws. First they are advertised in the local paper, sometimes for weeks before the actual auction. These legal notice contain all of the details of the mortgage and description of the property.

Also, as a matter of public record lists of delinquent homebuyers can be purchased for mass mailings. These are usually broken down by 30 day, 60 day, and 90-day delinquencies – some lists even come with mailing labels.

So it is clear that finding and contacting a troubled borrower is pretty easy, but the matter of concern is how do these foreclosure scams work and how are homeowners so easily fooled. Is there no way for a homeowner in active foreclosure to salvage something, if only the shred of their self-respect and their credit rating?

There are legal companies who advice desperate homeowners and others who buy properties out of foreclosure. The trick is separating the frauds from the investor who may be able to legally bail out the homeowner, maybe through a short sale.

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