August 17, 2009

Scam artists prey on fearful homeowners

U.S. homeowners fearing foreclosure are getting caught by scam artists who claim to buy a house, but don't take over the mortgage, advocates and attorneys said.

The companies claim to buy homes quickly in exchange for a small cash payment. They then may take the title of the house and renting rights, while never taking over the mortgage, the Charlotte (N.C.) Observer reported Monday.

The scam artists then rent the house, perhaps promising the renter their monthly payment will be applied against a purchase of the home. Eventually, however, the original homeowner realizes they are still named on the mortgage and at the first sign of trouble, the company disappears.

These people run in, they see what money they can reap, and if it doesn't work they just walk away, said Ruth Barbour, a North Carolina widow who was taken in by a home buying scam.

A lot of homeowners are facing foreclosure, and they're very vulnerable, said North Carolina state Rep. Jennifer Weiss, who is co-sponsoring legislation to allow the state to monitor the deals that, to date, require no government paperwork.

It really begs for legislation, said Al Ripley, an attorney with the North Carolina Justice Center. There are so many different ways they can concoct these things.