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Beware of scammers who promise to stop foreclosure

Massachusetts homeowners facing foreclosure will sometimes clutch at any straw to save their homes. Tragically, there are swindlers out there who will take advantage of people who are facing desperate financial situations. A group of individuals and companies were recently accused of defrauding financially strapped homeowners, in a nine-count complaint filed in nearby New Jersey.

According to the complaint filed by the New Jersey Attorney General's Office, three individuals and four companies they operated charged desperate homeowners up to $1,625 in monthly fees to help them rescue their homes from foreclosure. The defendants allegedly promised to negotiate with lenders to reduce the balance due on the mortgages and delay foreclosure proceedings.

According to the complaint, the defendants failed to provide the promised services; their only contact with the lenders was a single "cease and desist" letter. The complaint alleges the defendants made false representations to the victims; fraudulently obtained title to victims' homes for substantially less than market value; and filed bankruptcy petitions on behalf of victims without the victims' knowledge or consent. As a result of the allegedly fraudulent conduct, homeowners ended up worse off than before, because they spent money that could have gone toward their mortgage debt on monthly fees to the defendants.

Homeowners threatened with foreclosure do have legal options. In many cases, it is possible to stop foreclosure by filing a Chapter 13 bankruptcy. In Chapter 13, the debtor may be able to bring mortgage payments current through a court-supervised payment plan. If the homeowner has enough equity in the home, filing a Declaration of Homestead can also help prevent foreclosure.

Source: Patch.com, "These N.J. Companies Potentially Defrauded Thousands Of New Jerseyans: AG," Tom Davis, Dec. 5, 2016

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