Avoiding scams during debt management efforts

The fear of losing one’s home is a serious matter for Tennessee residents who are facing ongoing debt issues. Often, individuals or families have saved for many years to afford a home of their own. Once that goal has been reached, the house becomes a significant source of pride. Facing the risk of foreclosure can be extremely distressing, and can lead many reasonable people to follow a debt management path that leads directly toward a scam.

Unfortunately, there are plenty of individuals in the world who look to profit from the misfortune of others. An example is found in the case of three people who were recently sentenced for their roles in defrauding distressed homeowners. The three were part of a company known as Star Reliable Mortgage. They offered to assist homeowners through a “loan elimination” program.

Clients of Star Mortgage paid upfront for services, at a cost of between $2,500 and $4,500. In return, the company offered to assist the clients in owning their home “free and clear.” In reality, what the three individuals did was go down to county offices and file fraudulent documents pertaining to the homes. They were attempting to replace the trustees of the properties with fake trusts. That effort was intended to stall the foreclosure process, an act that is known as “clouding the title.”

One of the men was convicted of conspiracy and mail fraud. The other two pleaded guilty regarding charges of conspiracy to commit mail fraud. Their sentences range from nearly three years in prison to nine years in prison.

They are also ordered to pay restitution of more than $1.1 million to the people that were scammed and to Freddie Mac and Fannie Mae, which held many of the loans. Tennessee homeowners who are considering various debt management programs should carefully evaluate any offer of assistance before signing on the dotted line. While there are many programs that offer legitimate services, there are also many scams.

Source: recorderonline.com, “Three sentenced in foreclosure rescue scam“, July 26, 2017