Foreclosure Resolution Scams Target Desperate Homeowners

ABC News recently reported a story of a couple that was three months behind on their $390,000 home mortgage when they received a letter from a business by the name of U.S. Loan Auditors. The letter said their mortgage lender was currently under investigation and the couple may be able to join a lawsuit against the company. The couple then paid the business almost $9,000 over the next five months and stopped making their mortgage payments per the business’ suggestion. Only after their home was foreclosed upon was a lawsuit filed on the couples’ behalf. They were then evicted from their home this past September and now live in a trailer park.

Another couple in a similar situation was also contacted by U.S. Loan Auditors, who advised them to declare bankruptcy to postpone foreclosure and would charge the couple $1,000 a month for what they said were legal fees. However, the couple still lost their home, and the company continued to bill them $1,000 per month for a while after the loss of their property. The couple was eventually forced to close their bank account because the business wouldn’t stop charging the account.

California Attorney General Edmund G. Brown, Jr. said these couples and more are victims of a new kind of scam that is quickly becoming a national problem that deliberately preys on Americans who are in the midst of a foreclosure crisis and are desperate for help. In October, Brown sued U.S. Loan Auditors, its legal arm “My U.S. Legal Services” as well as the owners of the company for $60 million, alleging the company scammed thousands of homeowners for thousands of dollars. The lawsuit demands that the business pay civil penalties, as well as restitution for victims of the scam. An injunction was filed to prevent the business from making more false claims. In legal documents, Brown’s office alleges that “every step of the way, the defendants lie to clients and provide nothing of value and put them in even greater danger of losing their homes.”

Businesses such as U.S. Loan Auditors as well as other similar companies are promising they will conduct “forensic audits” of a person or couple’s mortgage transactions to see whether they discover proof of predatory lending or fraud. The businesses then allege they will use the evidence to take lenders to court to obtain a new mortgage at a more favorable interest rate on behalf of a person or couple. However, in most cases, forensic loan audits won’t help cancel a homeowner’s mortgage. In contrast to what businesses such as U.S. Loan Auditors promise, lenders can foreclose on a property after a predatory lending case has been filed against them. There is also no guarantee that mortgage payments will be significantly reduced or entirely frozen during litigation or that a bank will settle with a homeowner quickly.

Foreclosure is a very complex process, and unfortunately, as this article shows, many people fall prey to scams that promise to eradicate debt, prohibit the foreclosure process, or help with mortgage payments. If you are facing foreclosure in New Jersey, you should consult with an attorney who can help you determine the right course of action for your particular situation. The New Jersey mortgage foreclosure lawyers at The Law Offices of Robert Manchel are qualified to answer your questions regarding foreclosure or bankruptcy in New Jersey, and can advise you on your legal rights. Call us today at 866-503-5655.

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