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Foreclosee is the Debtor

Foreclosee refers to a kind of debtor. Before you become just another statistic or foreclosee, stop and look around you. Now is the time to look closely at what you owe and what you earn. Contact your lender as soon as you realize that you have a problem. Eliminate unnecessary spending. Reach out for help. If it’s not too late, the foreclosee who is desperate can still find ethical lenders, legitimate investors, and reputable companies for help. A foreclosee who is still inside the home can allow you to inspect before you buy. Foreclosee.com™ also affords the general public the opportunity to find everything from city to water front property.

Foreclosee lists waterfront property for sale which consists of a white house with a red roof on the beach.

What is a Foreclosee?

Foreclosee is a noun meaning the one with debt, namely the one whose mortgaged property is foreclosed upon and who is deprived of the right to redeem his or her property due to non-payment of money due.

Foreclosee refers to the borrower who is losing possession of his or her mortgaged property and whose ownership of such property passes to the mortgagee as a result of failing to keep up the mortgage payments. But don’t despair if this definition describes you. There’s still a way out if you pay close attention to details and carefully consider your options.

Foreclosee Finds Options

As a potential foreclosee you have many options from which to choose. You can rent from the rescue investors who save you. But always be careful to seek out expert legal advice. If you can’t meet your financial obligations, call an attorney before it’s too late and if the threat of foreclosure leaves you in a spiritual crisis call a chaplain today. Taking action today, may protect you tomorrow! Call today!

Foreclosee Should Seek Immediate Help

The possibility of a foreclosee losing his home to foreclosure is real and terrifying. However, the reality that scam artists are preying on the vulnerability of the desperate foreclosee is equally frightening. Our mission is to inform the foreclosee of possible scams.

A foreclosee should not wait until the “eleventh hour” to get help. But that’s what happens. Last year, the government was flooded with millions of calls and in many cases those calls came at the last minute.

Foreclosee and the Rescue Company

A foreclosee facing imminent foreclosure has been often taken advantage of by so-called foreclosure rescue companies or foreclosure assistance firms. These companies operate under a bait-and-switch technique, promising the foreclosee that he can save his home. Many firms inform the foreclosee that the company can more effectively navigate the maze of federal and state foreclosure assistance programs and speed the process along with the foreclosee’s mortgage servicer. Many companies were brazen enough to offer a money-back guarantee without placing the assurance in writing. Unfortunately, once a foreclosure fraudster takes the foreclosee’s money, the company leaves the foreclosee much the worse for wear.

It is NCRC’s counselors’ experience that fraudulent foreclosure “rescue” professionals use half-truths and outright lies to sell services that promise relief and then fail to deliver. Their goal is to make a quick profit through the fees or mortgage payments they collect from the foreclosee, but do not pass onto the lender. Sometimes, they even assume ownership of the property by deceiving the foreclosee. Then, when it’s too late to save the foreclosee’s home, they take the property or siphon off the equity. Ultimately, the foreclosee, who thought that he was working with a reputable firm, loses his home to foreclosure despite his best intentions.

How the Foreclosee Scams Work

Foreclosure rescue firms use a variety of tactics to find a foreclosee in distress. Some sift through public foreclosure notices in newspapers and on the Internet, or through public files at local government offices, and send personalized letters to the foreclosee. Others take a broader approach through ads on the Internet, on television, in the newspaper, with posters on telephone poles, median strips and bus stops, or with flyers or business cards at the front door.

Foreclosee has yellow loan modification sign on lawn to stop foreclosure.

The foreclosee scam artists use simple and straight-forward messages, including:

  • “Stop Foreclosure Now!”
  • “We guarantee to stop your foreclosure.”
  • “Keep Your Home. We know your home is scheduled to be sold. No Problem!”
  • “We have special relationships within many banks that can speed up case approvals.”
  • “We Can Save Your Home. Guaranteed. Free Consultation”
  • “We stop foreclosures everyday. Our team of professionals can stop yours this week!”

Once they have a foreclosee’s attention, they use a variety of tactics that have been well-documented by the National Community Reinvestment Coalition, Housing Counselors, the Federal Trade Commission, State Attorney Generals, The United States Department of Housing & Urban Development, the National Consumer Law Center, and the media.

Foreclosee Mortgage Scams are Documented

NCRC’s Housing Counselors have reported some of the schemes which are becoming increasingly prevalent. NCRC fair lending “testers” or “mystery shoppers” have documented scenarios that a foreclosee should be aware of or try to avoid.

Foreclosee Faces Reverse Mortgage Fraud

Method: Elderly people who may have lost retirement funds sometimes turn to a reverse mortgage, which allows them to take a new mortgage out on a house they’ve already paid off. While this is sometimes a helpful tool, industry watchers and government officials warn about people charging sky-high fees.

Result: Elderly people are either cheated by high fees or, in worst-case scenarios, lose their house because they signed documents they did not understand. NCRC has testified on this issue before the House Financial Services and Judiciary Committees.

Foreclosee is Victimized by Phantom Help

Method: A type of foreclosure rescue scam in which a fraudster collects an upfront fee from the foreclosee trying to save his home from foreclosure — and then the fraudster disappears.

Result: Criminals do nothing and pocket the fee.

Foreclosee is Victim of Mortgage-Related Identity Theft

Method: Perpetrators use stolen identities to buy properties outright or take out mortgages.

Result: The foreclosee discovers he is a victim and that he is on the hook for mortgages and loans, even though he believed that he was released from his mortgage obligation.

Foreclosee Suffers Short Sale Fraud

Method: A buyer colludes with real estate agents or others to give faulty appraisals or broker price opinions to banks and convinces them a property is worth less than it is.

Result: Banks are defrauded and surrounding property values can drop. This is a growing problem, and NCRC is very concerned about the use of BPOs in the Obama administration’s new Make Home Affordable Foreclosure Alternatives Initiative.

Foreclosee Falls Prey to Bait and Bump

Method: Lenders or brokers dangle attractive loans in front of the desperate foreclosee. But when it comes time to close, buyers are told that they do not qualify or that it’s too late to switch.

Result: The foreclosee is left with a mortgage that he can’t pay for or ends up signing away his home.

Foreclosee Faces Equity Stripping Or Skimming

Method: There are several definitions for this, one of which is synonymous with lease buy-back (see below). Another iteration occurs when a fraudster convinces people to invest in or buy properties, using their credit to get loans for inflated property values, but walks away.

Result: Investors are left with properties, which often have been neglected and have gone into foreclosure.

Foreclosee Falls Victim to Lease Buy-Back

Method: The foreclosee facing foreclosure signs over the deed to a company or individual who promises to sell it back after a period of time, during which the foreclosee can get his finances in order. In the meantime, the foreclosee is told he will be allowed to rent the house.

Result: The scammer evicts the foreclosee who wanted to become a renter and keeps or sells the property.

Foreclosee is Victimized in Bankruptcy Foreclosure

Method: The scam artist may promise to negotiate with the lender or to get refinancing for the foreclosee if he pays an up-front fee. Instead of contacting the lender or refinancing the loan, the scam artist pockets the fee and files a bankruptcy case in the name of the foreclosee — sometimes without his knowledge.

Result: While this bankruptcy filing may stop the home foreclosure, it will only temporarily do so. Furthermore, the bankruptcy process is complicated, expensive, and unforgiving. For example, if the foreclosee fails to attend the first meeting with the creditors, the bankruptcy judge will dismiss the case and the foreclosure proceedings will continue. Ultimately, the foreclosee will lose the money he paid to the scam artist as well as the home. Also, a bankruptcy stays on the credit report of the foreclosee for 10 years, and can make it difficult for the foreclosee to obtain credit, buy a home, get life insurance, and sometimes get a job.

Every Foreclosee Should Recognize 10 “Red Flags”

Any foreclosee looking for foreclosure prevention help, should avoid any business that:

  • Guarantees to stop the foreclosure process — no matter the circumstances in which the foreclosee may find himself;
  • Instructs the foreclosee not to contact his lender, lawyer, credit or housing counselor;
  • Collects a fee before providing the foreclosee with any services;
  • Accepts payment from the foreclosee only by cashier’s check or wire transfer;
  • Encourages the foreclosee to lease his home so he can buy it back over time;
  • Tells the foreclosee to make his mortgage payments directly to it, rather than his lender;
  • Tells the foreclosee to transfer his property deed or title to it;
  • Offers to buy the house from the foreclosee for cash at a fixed price that is not set by the housing market at the time of sale;
  • Offers to fill out paperwork for the foreclosee; or
  • Pressures the foreclosee to sign paperwork he has not had a chance to read thoroughly or that he does not understand.

How Can a Foreclosee Avoid Becoming a Victim?

  • The foreclosee should be skeptical of people who make unsolicited contact.
  • The foreclosee should not hesitate to ask as many questions as he needs to ask, until he understands what he is signing.
  • The foreclosee should not sign blank forms.
  • The foreclosee should check to make sure his name appears correctly on documents and matches his identification.
  • The foreclosee should check out the company, mortgage agent, real estate agent and lawyer through state agencies.
  • The foreclosee should review the value of the home by comparing it with others nearby, and the foreclosee should go over the sales history of the home to see whether the value has been inflated through multiple sales.
  • The foreclosee should remember, if it’s too good to be true, it probably is. All HAMP, HARP and FHA assistance programs are time consuming and servicers are overwhelmed by requests for assistance.
  • The foreclosee should not believe any provider’s representations that they will be able to fast track your application at a cost.

Foreclosee Victimized by Foreclosure Modification Scam

NCRC Fair Lending Audit

Foreclosure modification scams have been a problem for years. However, with the recent increase in foreclosures, scams have become more prevalent and present a significant concern for the foreclosee. By promising an easy fix for a fee, scammers mislead the foreclosee into believing that he will get a modification that significantly lowers his payment, or stabilizes an exploding adjustable rate mortgage (“ARM”). The foreclosee is encouraged to deal only with the for-profit company or mortgage service provider, and the foreclosee is sometimes advised to cease making payments as the foreclosee is contractually obligated to do. Scammers often fail to deliver the services they advertise, and the foreclosee is left in a worse position than before — further behind on his home loan, with no recourse or hope of a refund.

More vulnerable than ever, the foreclosee may fall prey to other schemes, such as a transfer of title without a release of the mortgage obligation. Directed to make rental payments to the new owner, the home may still fall into foreclosure. At the end of the process, the foreclosee finds himself without equity, with scarred credit, and with nothing to fall back on. Community ties are ruptured and neighborhoods become more prone to blight, disinvestment, and elevated crime.

To address the concerns surrounding rescue scams, NCRC conducted a research study for three months in mid-2009 by using “fair lending matched pair testing” or “mystery shopping” to assess the extent of the problem. Its findings demonstrated that an aggressive legislative solution and added public and private oversights and enforcement were necessary to prevent a foreclosee from being harmed.

Fair Lending Audit Methodology for the Foreclosee

Mystery shoppers called national and local foreclosure prevention service providers to ascertain:

  • The cost of the service fees the foreclosee must pay;
  • The types of services offered to the foreclosee;
  • The documentation that was required of the foreclosee to receive services; and
  • The types of agreements/arrangements the troubled foreclosee must enter to receive services and/or keep his home, and other recommendations that were made.

Each mystery shopper posed as a distressed foreclosee who was delinquent in his mortgage payments and needed foreclosure prevention assistance.

Shoppers informed service providers of a scenario in which they had received an interest-only loan that was initially affordable, but had adjusted sharply to rates above the current market. After several years in their homes, the shoppers had lost at least 20 percent of their property value, but could afford their mortgage balance under the initial terms of the loan, and under current market rates. Each troubled foreclosee had missed the previous month’s payment and had been yet unable to pay the current month’s payment, making him or her 31 to 59 days behind, depending on when the test was conducted. No shoppers were yet in foreclosure, and a loan modification would be a sustainable solution to ensure continued homeownership.

Mystery shoppers were instructed to only disclose information about their financial hardship, and not to disclose personal information such as property address, date of birth, last name, home phone number, social security number and loan number.

In this study, the intent was to replicate the behavior of a troubled foreclosee who is on the cusp of foreclosure, is seeking help, and is a viable candidate for assistance. In total, over 200 “shops” of foreclosure prevention service providers were conducted.

NCRC’s Housing Counseling Network and National Neighbors professional staff used the Internet, radio advertisements, complaint and intake logs and in-house database repositories to research and identify national and local foreclosure prevention providers.

When the study ended, the findings revealed a growing industry that came with potential benefits, but also its share of possible scams.

In conclusion, the foreclosee should investigate credentials, pay careful attention to details, and compare costs. During research, a list of 115 service providers was generated. Seventeen of these were found to have invalid phone numbers, indicating the “fly-by-night” nature of this emergent industry. Fees and costs to the foreclosee were found to vary greatly across the project. A foreclosee paid from $199 for a do-it-yourself foreclosure prevention kit, to a modification fee of $5,600 over four months. Furthermore, it’s also worth mentioning that less than half of the testers were informed about fees, and only in a handful of cases did the company offer them in writing. Suffice it to say, the foreclosee should conduct his or her own research and always exercise due diligence.

3 Key Takeaways for a Foreclosee

If the foreclosee seeks the right kind of help before it’s too late, he or she can escape hardship. Much trouble can be avoided.

Taking the following 3 actions are key:

  • observing all deadlines and time frames
  • examining all credentials and backgrounds
  • comparing all rates and fees

A foreclosee for example can shop around to compare costs and then ask reputable lenders for help before it’s too late. But that’s not the only kind of help you might need, nor the only kind available to you. In the event you need legal help, find a lawyer. Seek legal advice from a qualified attorney.

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