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Rescue schemes snare homeowners
Some homeowners who accept aid to avert foreclosures lose their homes anyway.
By MONICA HATCHER
The Miami Herald
Sherry Miller said she signed the foreclosure assistance agreement blindly, page after page, desperately believing it was the only way to stop the sale of her home on the courthouse steps the next morning.
No sooner had she put the pen down than she was told that her Doral home would be listed for sale anyway, Miller claims. Among the flurry of pages she had signed: a deed to her home.
''It's the most horrible feeling you can imagine,'' Miller, 60, said about realizing she had signed her home away. ``It's like somebody telling you they're going to cut both your legs off.''
As rising interest rates, high energy costs and skyrocketing insurance premiums put more homeowners in danger of falling behind on their mortgages, a new crop of investors -- drawn to South Florida by soaring real estate values -- is looking to capitalize on their hard luck. As a result, consumer advocates have seen a spike in the number of homeowners losing their homes in so-called foreclosure rescue schemes.
Jeffrey Hearne, a lawyer with Legal Services of Greater Miami, which serves lower-income clients, said about two people a week show up at his door holding eviction notices after doing business with one of possibly hundreds of home-saver investors operating in Miami-Dade and Broward counties.
''It kind of comes and goes, but over the last few years, the problem has picked up significantly in Miami,'' Hearne said. 'They come to our offices saying, `I'm being evicted from my home I've owned for 30 years.' ''
Investors specializing in distressed properties are nothing new. For years, real estate agents and mortgage brokers have legally helped people avoid foreclosure -- which can badly scar a credit report and uproot people from long-held homesteads -- by selling their houses quickly or arranging refinancing.
ONE COMMON TRAIT
But foreclosure rescue schemes fall into a gray area, ranging from the questionable to the outright fraudulent. Consumer attorneys say they are seeing it all. But among the growing caseloads of rescue complaints, each has this in common -- a ploy to strip away the wealth homeowners have built in their property and pocket it for themselves.
To address the problem, the Florida Legislature passed a law this year making it unlawful to knowingly use unfair or deceptive trade practices to victimize homeowners in foreclosure. The law, which took effect Saturday, hasn't been tested.
South Florida has become extremely vulnerable to foreclosure schemes because its expanding real estate market has allowed even relatively new homeowners to quickly build equity in their homes, lawyers say. At the same time, borrowing against that equity became widespread, as individuals used it to renovate, pay down consumer debt, or invest in other properties.
James Johnson, the Florida Office of Financial Regulation's area manager of investigations who is probing several foreclosure rescue scams, said even seemingly undesirable properties have become attractive to home-savers because the amount owed on the property may be significantly less than it's now worth.
''A lot of times [owners of these properties] have lived in their houses 20 to 30 years. They might have refinanced to get cash out, and so a property that was once owned free and clear is now vulnerable because they can't afford the monthly payment on their new mortgage,'' Johnson said.
http://www.ledger-enquirer.com/mld/ledgerenquirer/news/nation/14969946.htm
Some homeowners who accept aid to avert foreclosures lose their homes anyway.
By MONICA HATCHER
The Miami Herald
Sherry Miller said she signed the foreclosure assistance agreement blindly, page after page, desperately believing it was the only way to stop the sale of her home on the courthouse steps the next morning.
No sooner had she put the pen down than she was told that her Doral home would be listed for sale anyway, Miller claims. Among the flurry of pages she had signed: a deed to her home.
''It's the most horrible feeling you can imagine,'' Miller, 60, said about realizing she had signed her home away. ``It's like somebody telling you they're going to cut both your legs off.''
As rising interest rates, high energy costs and skyrocketing insurance premiums put more homeowners in danger of falling behind on their mortgages, a new crop of investors -- drawn to South Florida by soaring real estate values -- is looking to capitalize on their hard luck. As a result, consumer advocates have seen a spike in the number of homeowners losing their homes in so-called foreclosure rescue schemes.
Jeffrey Hearne, a lawyer with Legal Services of Greater Miami, which serves lower-income clients, said about two people a week show up at his door holding eviction notices after doing business with one of possibly hundreds of home-saver investors operating in Miami-Dade and Broward counties.
''It kind of comes and goes, but over the last few years, the problem has picked up significantly in Miami,'' Hearne said. 'They come to our offices saying, `I'm being evicted from my home I've owned for 30 years.' ''
Investors specializing in distressed properties are nothing new. For years, real estate agents and mortgage brokers have legally helped people avoid foreclosure -- which can badly scar a credit report and uproot people from long-held homesteads -- by selling their houses quickly or arranging refinancing.
ONE COMMON TRAIT
But foreclosure rescue schemes fall into a gray area, ranging from the questionable to the outright fraudulent. Consumer attorneys say they are seeing it all. But among the growing caseloads of rescue complaints, each has this in common -- a ploy to strip away the wealth homeowners have built in their property and pocket it for themselves.
To address the problem, the Florida Legislature passed a law this year making it unlawful to knowingly use unfair or deceptive trade practices to victimize homeowners in foreclosure. The law, which took effect Saturday, hasn't been tested.
South Florida has become extremely vulnerable to foreclosure schemes because its expanding real estate market has allowed even relatively new homeowners to quickly build equity in their homes, lawyers say. At the same time, borrowing against that equity became widespread, as individuals used it to renovate, pay down consumer debt, or invest in other properties.
James Johnson, the Florida Office of Financial Regulation's area manager of investigations who is probing several foreclosure rescue scams, said even seemingly undesirable properties have become attractive to home-savers because the amount owed on the property may be significantly less than it's now worth.
''A lot of times [owners of these properties] have lived in their houses 20 to 30 years. They might have refinanced to get cash out, and so a property that was once owned free and clear is now vulnerable because they can't afford the monthly payment on their new mortgage,'' Johnson said.
http://www.ledger-enquirer.com/mld/ledgerenquirer/news/nation/14969946.htm
