Foreclosure Scams – OTS issues Warning to Consumers

The Office of Thrift Supervision (OTS) recently issued a warning to consumers to be on the lookout for various schemes aimed at troubled homeowners:

Three types of schemes are common:

§ Phantom help – The purported rescuer charges high fees for no work or for services that the homeowner could have easily handled or obtained free from legitimate organizations.
§ Bailout – A homeowner surrenders the title to the home after receiving a false promise that the he or she can remain as a renter and buy back the home later. The scam artist obtains possession of the home and most or all of its equity.

§ Bait and switch – Victims are told they can refinance their homes but instead sign documents transferring the titles to scam artists, while the victims remain responsible for making the mortgage payments.