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SCOTT JAGOW: Now what happened was a couple of big banks said they’re holding billions of dollars in bad home loans to Americans. We’re already seeing a huge spike in foreclosures, and when people are suffering, of course, other people try to take advantage of them. Steve Tripoli tells us about foreclosure rescue scams.
STEVE TRIPOLI: These scams start with a lender’s public notice of intent to foreclose.
Harvard Law School bankruptcy expert Elizabeth Warren says scam artists avidly read those notices. The first danger sign is their call or visit.
ELIZABETH WARREN: If they got in touch with you, stay away from them. It’s a very bad sign.
Foreclosure scammers promise to rescue your home, but they’re really out to strip its equity. They’ll charge a lot for useless assistance. Or trick homeowners into signing the house over to them, supposedly temporarily.
Warren says the deals are often fast and shady.
WARREN: You know, all the representations will be oral, and all the cheating will take place on paper.
But homeowners are often scared and desperate. And scammers tell them to avoid the one thing they should do: talk with their lender.
Warren’s advice? Try hard to keep your head.
WARREN: You’ve gotta remember: if you’re having trouble paying your mortgage, you’re now swimming in water with sharks.
And their bait is your home equity.
I’m Steve Tripoli for Marketplace.
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