Beware Foreclosure Scams

Beware foreclosure rescue scams. After a lull of 50 years, this lowlife means of stealing a home has returned, with a vengeance, taking advantage of the fears of homeowners lured into borrowing more than their home was really worth, and now desperate to find a way to avoid foreclosure.

If you have seen the signs popping up offering to buy homes fast, beware. Many of them are a come-on to take advantage of you, with what Harvard Law School professor and bankruptcy expert Elizabeth Warren calls a "cement lifejacket."

The scams vary, from simply offering a service to get the foreclosure forestalled or eliminated, while others will ask for a fee and a deed in trust, hiding the true ownership of the property and selling and re-selling it. What all of the scams have in common - the consumer is out of their cash, and the foreclosure still proceeding. In the worst cases, they remain obligated to pay the underlying mortgage, but no longer own the home.

This phenomena has not escaped the eye of state or federal law enforcement. Most recently, the Federal Bureau of Investigation has obtained an indictment against on Ohio man, alleging eight counts of Mail Fraud, and over $500,000 bilked from unsuspecting homeowners.

James A. Warsing of Ashtabula, Ohio, operating as WJW Enterprises, allegedly used a promise to use the money to settle their $3,000 to $5,000 payments to settle foreclosure cases, but instead converted the money to his personal use. The indictment claims these activities took place between 2001 and 2005.

Warsing is no stranger to being called to task for his misdeeds. In October 2004, Ohio Attorney General Jim Petro charged Warsing with violations of Ohio's Consumer Protection laws. Warsing was convicted of those charges in June 2006, and was ordered to make restitution to 18 people, as well as to pay fines totally $300,000.

"Homeowners deserve to be protected from unscrupulous business practices," Petro said. "It was unconscionable for Mr. Warsing to take advantage of people already down on their luck, and we're pleased he has been brought to account for it."