Warning: Foreclosure Scams Abound

A nasty foreclosure scam has turned up in California that federal officials have indicted 20 people for involvement.

It's complicated, but involves a scam known to include "Straw Buyers".

According to the MetroTex Association of Realtors in North Texas, Straw Buyers are described as "loan applicants that perpetrators use to obtain home loans, but who usually don't intend to occupy the properties they're buying."

Scammers will pay someone (the straw buyer) to use their name and credit information on a mortgage application to buy a home. The individual isn't buying the property and probably has never seen it. They merely sold their name and good credit.

The scam artist will then often take over the payments on the mortgage, and assume title to the home. What they do with the mortgage or home title can vary. But both are guilty of fraud, The straw buyer can also end up being responsible if the lender forecloses and there is a deficiency balance left over.

In this recent scheme, scammers have allegedly made about $12 million from over 100 victims that they tricked out of their homes. Charles Head, 33, of Los Angeles is accused of orchestrating it all, using 2 different "foreclosure rescue" companies to strip equity and take over properties from distressed homeowners, who pay the scammers extra, and end up losing their homes on top of it all.

Prosecutors say that the criminals approach distressed buyers and offer to save them from foreclosure by taking over the mortgage, making it current, and the homeowners then add the criminals to the title of the home.

Some of the 20 indicted people were used as "straw buyers"...being paid to take out equity lines on the property after being added to titles.

Eventually, the scammers may sell the homes, stop making the mortgage payments, and/or being eviction proceedings against the victims...who are now out of a home as well as their equity.

A second indictment from a federal grand jury also included Head and 2 others from the original indictment with other equity-stripping schemes that have added another $5.9 million in losses to other victims on a nationwide level.

The Metrotex BOR list several red flags that consumers should watch for in general to avoid being involved in a real estate fraud scheme. In these cases, three listed would have indicated a problem:

*Amended Contract to Reflect a New Purchaser.
*Multiple Transactions Between Affiliated Parties
*Agreements to be Performed "Outside or After Closing"

Buyers and homeowners need to be on their guard against any company that promises unusual help or a magic way to avoid foreclosures. Try everything you can to work things out with your bank or mortgage company, and don't believe everything you hear.

For information on foreclosures in Myrtle Beach SC, visit our Myrtle Beach Foreclosures website and contact us for a listing of available properties. Search the MLS for Myrtle Beach Real Estate at www.myrtlebeachcondos.net