Homeowners: Beware of Foreclosure Scams

You face imminent foreclosure on your house. You are afraid you will lose your home. You hear an advertisement from a company that offers to refinance loans for homeowners to pay bills, if the homeowners have equity in their homes. You should beware of such advertisements. No doubt there are many legitimate companies who will refinance a home loan for you, but there are also many foreclosure scams out there from companies who are out to take advantage of those who are in danger of losing their homes to foreclosure. Nearly 2 million Americans are facing foreclosure on their homes as adjustable rate mortgages reset at higher rates.

American Darrell Sa'lley was one American who faced just such a scam. After two surgeries for cancer, Sa'lley was months behind on his mortgage. Naturally, he feared he might lose his home. He heard a radio advertisement from a company that promised it would refinance loans for homeowners, if they have equity in their home. The advertisement said the money saved could be used to pay bills.

Sa'lley signed numerous documents with the company, thinking he would get an advance loan for refinancing. His attorneys now believe, however, that he was a victim of a foreclosure scam, as he signed away the deed to his house and lost all the equity he had put into it during the five years of ownership.

Attorneys Wanda Cooper and Tanya Bullock now represent Sa'lley for free, and Bullock claims Sa'lley "was not informed of what was happening." According to the attorneys, what Sa'lley actually received was a sale of his home, with the right to rent or buy the house back. He was not given the right to cancel.

The company Sa'lley became involved with was forced to give it back, because of a legal technicality. The company never made mortgage payments while it had control of the house, however, so Sa'lley still has to fight for his home.