Friday, April 11, 2008

Troubled homeowners fall prey to "rescue" scams

Go to Reuters original
EASTPOINTE, Michigan (Reuters) - Among the byproducts of the U.S. housing crisis is a surge in scams that cheat people out of their money, their homes, or both, under the guise of offering to rescue them from foreclosure.

"There is a lot of money to be made if you are good at committing fraud," said Debra Zimmerman, an attorney at Los Angeles-based Bet Tzedek Legal Services, which provides free legal assistance to stricken home owners. "Foreclosure rescue scams are big business right now."

Groups like Zimmerman's say that as soon as borrowers end up in foreclosure -- a matter of public record in the United States - they are bombarded with calls, leaflets and knocks on the door from people armed with fraudulent offers of help.

Huston Julian, 54, of Eastpointe, Michigan, nearly fell for such a scam. Julian bought a home in this working class suburb of Detroit in October 2006, but fell behind with his $1,084 monthly payment when his disability benefits were cut off. He ended up in foreclosure in December.

"I got calls all day from people saying they could save my home," said Julian, 54, seated at a small table in his kitchen.

One group promised help if he gave them $3,800. He borrowed money from family and was all ready to pay, until his suspicions were aroused by the frequency of their calls.


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