In yesterday’s Arizona Republic, Catherine Reagor talked about "foreclosure rescue groups":
For those on the verge of losing their home, foreclosure-rescue groups seem like their only hope. But many so-called rescuers aren’t helping at all.Instead, their offers are thinly veiled schemes to take control of a struggling homeowner’s house and strip any equity left in it.
"Foreclosure rescue sounds like something good, but it isn’t. There are some sharks out there," Arizona Attorney General Terry Goddard said. "They are taking advantage of desperate homeowners and need to be stopped."
There are variations on the rescue theme, but generally these companies promise to helping homeowners refinance or lease back their property temporarily- then take over the property and evict their victims.
Reagor gave the case of Mary D’Amico:
Mary D’Amico was in the middle of a divorce last fall and was struggling to make the payment on the Queen Creek home she and her husband bought in late 2004.
After she fell a few months behind, the calls from her lender started. Then came the calls offering help.
"I didn’t know how they got my name, my phone number or so much information on how much money I owed," D’Amico said. "I needed about $6,000 to catch up on my payments, and people were offering to lend or even give me exactly that much."
D’Amico wasn’t suspicious of the foreclosure-rescue group she worked with. It had ties to her friend’s church.
She got the $6,000 she needed. And she started making payments to the group that was supposedly helping her catch up. Her monthly payments were a little higher, so she thought her mortgage had been refinanced to include the $6,000. She didn’t know she had signed over her house in the process. She found out when the group sold the house out from under her.
Foreclosure rescue scams are not only increasing in Arizona, but around the U.S. as well. The Bellingham Herald reported on a family that also lost their home: [Hat tip CRisk's Tanta!]
The Johnstons say that medical problems got them behind on mortgage payments on the Tuttle Lane home on six acres they had purchased in 1992.
In January 2004, the suit states, Darcee Johnston saw a sign advertising Peter Torkild.
as someone who could help with debt and mortgage problems. Faced with foreclosure, the couple contacted Torkild in his office at Top Mortgage, where Torkild formerly worked.
The suit says Torkild told them he could arrange to acquire their home at the foreclosure sale and then lease it back to them until they could get their finances back in order and repurchase it.
Torkild reportedly told the Johnstons that allowing the foreclosure to occur would be in their best interests.
Then, the suit states, Torkild set up First Capital Inc., a corporation controlled by his wife, Julia. First Capital paid off the Johnstons’ bank to become the mortgage holder on their home and real estate.
Torkild then arranged to have himself appointed trustee in the foreclosure sale, and his wife’s corporation was the sole bidder on the property. With title to the property in hand, the Torkilds then charged the Johnstons a monthly lease payment that was higher than their mortgage payment had been and, according to the suit, evicted them when they could not pay.
Reagor quotes Diane Drain, a Phoenix area attorney who specialises in foreclosures and bankruptcies:
If someone knocks at your door and offers help, assume they are out to help themselves.
It sounds like a safe assumption.
I hate to burst your bubble, but regarding the Johnston article, she was a paralegal for 14 years, and she is not being honest with the facts. Simply put, she is using facts and circumstances experienced by victims of real foreclosure rescue scams to get the house back that she lost over three years ago in foreclosure. She was not evicted until her lease was up and she refused to move out. And the statements about her lease amount being higher, are also a lie. A judge already heard her story three times and evicted her, dismissed her claims to the property, and he released the lis pendens. Its people like the Johnstons that make it more difficult for the real victims to be believed.
Truthmatters-
L shares your skepticism:
Here’s a follow up report from KGMI news in Bellingham, WA:
Charges dropped against Bellingham Couple
The state has dropped charges against a Bellingham couple over a foreclosed Lummi Island home. Regulators had accused Peter and Julia Torkild over committing an illegal “foreclosure rescue scheme” that allowed them to take control of the home under the guise of helping the owners avoid foreclosure. A civil case against the couple has also been thrown out.
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It slowly became apparent to the prosecutor that she made a big mistake when she tried to convince a judge that rent paid by the Johnstons after Julia paid cash for the house at a foreclosure sale, should be considered “stolen”, even thought he sale was deemed good and valid. The prosecutor claimed that Julia “stole” the house by buying it at the foreclosure sale, and then “stole” each month’s rent while the Johnston’s were getting a commercially reasonable value for the rent they paid. The judge questioned that argument, and the prosecutor quit the Attorney General’s office right afterward, apparently to avoid having to deal with the mess she had started. All charges were subsequently dropped by the prosecutor taking over the case.