“They have a subscription to a foreclosure filing list at the Daly Center and they know every day when a foreclosure has been filed and they mail out letters to anyone who has been foreclosed on,” said Michael Van Zalingen, director of Homeownership Services in Chicago. “They don’t really care demographically who the person is,” he added.
Victims of these scams typically do not know what they are signing and more often than not end up losing ownership of their homes. Attorneys in Chicago have seen a rise in clients in this situation.
“The most common is the refinance loan – that what they thought was a refinance loan was actually deeding away their property,” said Shabnam Faruki, an attorney at the Legal Assistance Foundation in Chicago. “They think they are making monthly payments to a lender, so they are mortgage payments, but what they are actually paying are just rent payments,” she said.
Last year, the Illinois Attorney General’s office received a little more than 2,400 complaints related to residential lending fraud, including predatory loans, or loans made at very high interest rates, and mortgage rescue scams.
“There were really almost no actions a year ago,” Van Zalingen said.
In the past six months, the Illinois Attorney General filed suit against 11 different companies, but Faruki says these cases are not always easy to win.
“It’s often an uphill battle to convince a judge that there was fraud that took places because there are written documents or what looks like a document that two people have signed,” Faruki said.
That puts the onus on distressed homeowners to recognize these scams.
Experts advise troubled homeowners never to respond to solicitation in the mail and be wary of companies that charge up-front service fees.
We’ve all heard it a million times, but homeowners would do well to remember that if an offer sounds too good to be true, it probably is.
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