Seniors Target For Foreclosure Scams

by Rose Broyles

In these tough economic times, millions of homeowners are facing foreclosures due to the sub prime lending crisis.  Of those homeowners, a good portion of them are seniors who have found themselves in deep water because of predatory lending schemes. 

Who are these Predators?

Many of these companies are fly-by-night operations. Periodically, I’ll get pieces of junk mail from companies claiming to either lower my property taxes or make offers to refinance my house at a lower rate than my bank. Sometimes, if you look at these letters, at first  glance, you may see your bank on the front cover. There were a couple of times when I looked and thought it was my bank and then I read the fine print at the bottom of the letter that stated that there was no affiliation. To an unsuspecting senior, this could spell trouble.  I’m not going to go out on a limb and say that every piece of mail that I have received was from an unscrupulous organization, but I’m sure there were a couple of them thrown in the mix. 

What are Their Tactics?

Foreclosure filings are public information as are property taxes. It’s easy for a person or group to look up information on a property and then call the owners to try  and persuade them to use their services. Predatory companies will target seniors who are low-income or facing financial difficulty. These seniors are on a fixed income so they rely heavily on the equity built up in their home. For many of these seniors, their home has a large amount of equity built up over the years. These seniors are fooled into believing that the company or advisor will save them from a foreclosure filing when in fact, they plan on walking away with the home’s title and equity. 

How to Avoid Being Scammed

It’s important to talk to your loved ones about being cautious towards anyone claiming to help them financially or otherwise. In fact, if your loved ones are willing, it’s best if you take a hand in guiding them through any financial process. Nevertheless,here are some red flags to look out for:

• Look out for anyone claiming to be a mortgage consultant or something similar like  foreclosure service.
• Look out for door-to-door solicitation 
• Anyone who charges a fee before providing services 
• Any company or individual that requires you to pay them directly  instead of your lender
• Any company or individual company who asks you to transfer your deed or title to them.

An important piece of advice: talk to your lender. They should be the first ones to talk to as soon as you find yourself underwater. Any company or individual who advises otherwise is not being forthcoming. Never feel pressured to sign any contract without a lawyer present. Everything should be in writing. If your loved one speaks a language other than English, make sure they have someone present who can translate the information to them. 

It’s really disheartening and downright disgusting that there are those who would prey on the most vulnerable of our citizens and ruin their lives. Yet as advocates for our parents and relatives who need our help, it is up to us to make sure that they have the resources they need to avoid a financial disaster. 

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• Craig and Marc Kielburger: The Foreclosure Battleground (huffingtonpost.com)

Tags: foreclosure scams, sub prime lending

This entry was posted on Monday, February 2nd, 2009 at 2:10 am and is filed under Financial, Getting Involved, Housing, Legal, Long-Term Care. You can follow any responses to this entry through the RSS 2.0 feed.