Sunday, April 7, 2013

A Primer on Foreclosure Rescue Scams

Guest blog post
By Sarah Parr

Foreclosure rescue scam artists are some of the most heartless “businessmen” in the United States today. They entice desperate homeowners who fear losing their home with encouraging words and promised results, then run off with their money, their home or worse, both. Scam artists may look through foreclosure notices posted in public media and target clients from areas known as centers of foreclosure activity. They use common and widespread advertising methods to attract clients: fliers, radio ads, billboards, etc.

Foreclosure rescue and mortgage relief scams have proliferated in recent years, with an estimate of billions of dollars lost. There are three general schemes to look out for that could signal a foreclosure rescue or mortgage relief scam.

Upfront costs
Consumers often report unethical companies that charge clients for access to government programs and housing counseling. Qualification of specific government programs that aid in the loan modification process or foreclosure defense is free. It is also free to speak with a government agency-approved housing counselor, according to Information on the latest government program or agency-licensed housing counseling can be found easily on the Internet. Additionally, a company could be fraudulent if it asks for a large amount of money upfront for access to the latest government program or a recent mortgage settlement. Homeowners should also watch out for companies that advise homeowners to pay mortgages to them and not to the loan provider.

Promise of definite results
Aid against foreclosure or the reasonable modification of a loan is never guaranteed, and access to specific government programs may only be available for certain borrowers. Alas, scam artists will do anything to convince consumers that loan modifications and foreclosure defense carried out by their company are guaranteed. A scam artist will almost always pose as a member of a fake organization licensed by, or affiliated with, the government and claim that a homeowner qualifies for a specific government program that aids in homeowner relief.

So-called professionalism
Scam artists will try any scheme to appear authentic and reliable. Non-attorneys often pose as attorneys from law firms that only offer loan modification services, reports the New York Times. Some law firms even disguise as non-profit groups that offer loan workouts or forensic loan audits. Consumers should be distrustful of these lawyers, especially because most law firms provide loan modifications as one of many services and loan workouts and audits have been proven useless.

Another kind of phony professional, in a “bait and switch” tactic, may convince a client to quickly sign paperwork that signs their rights to their house away and gives them to the scam artist. Others act generous and suggest the owner sign away the house, but stay in it until he or she has recovered financially. They will reassure the former homeowner that he or she will be able to reclaim the house once he or she has improved money-wise. However, the scam artist will be able to evict the victims and claim the home.

People on the verge of losing their home should be cautious of the common schemes covered above. Also, homeowners who would like a loan modification or who are at risk of foreclosure should never avoid any communication from their lender. Free housing counseling is provided by government agency-certified housing counseling agencies, or by contacting the Homeowners’ HOPE Hotline.

Saturday, April 6, 2013

Fraud is always prevalent where money is exchanged, especially in Forex

The Internet has been the great facilitator of change over the past decade, but it has also enabled many disparate consequences, as well. Whether we like it or not, there is a criminal element in our society that is always poised to use technology to separate us from our hard-earned money. Trading the world’s currencies over the Internet has been another area that has experienced explosive growth and popularity over this same decade, but fraudsters have been present every step of the way.

 Any service that involves money will attract organized crime, and foreign exchange was no different. Fraudulent brokers were the largest problem, but the Commodity Futures Trading Commission (CFTC) stepped in and began ridding the market of fraudsters, regulating the forex market at large, and educating consumers as to the pitfalls and opportunities of forex trading. (For more info, go to 

Despite performing a yeoman’s task, the CFTC, like other regulators, has a limited budget. They have reduced fraud to an acceptable level, but it still persists. Every investor should always be skeptical and cautious, especially since your so-called business partners on the Internet are anonymous and face-less. More due diligence is necessary, and awareness will always be your first line of defense. Here are a few tips on what to be wary of:

 • Unscrupulous Brokers: The CFTC has not eliminated all of the crooks. Beware of hard-to-believe marketing claims, especially from overseas brokers. Imagine trying to enforce your rights in another national jurisdiction. It would be a nightmare. Only deal with highly regulated, reputable domestic brokers that have been in the business for quite a while (For more info on forex broker reviews, click here);

 • High Yield Investment Programs (HYIP): This term is nothing more than a substitute for a Ponzi scheme. Potential investors are promised outrageous returns on a monthly basis, as if that were truly possible. Greed takes over, and the “mark” makes an initial deposit. He will be shown great early results on sophisticated looking reports with pictures of electronic trading rooms to seal the deal, causing him to recommend this wonderful service to his entire network of family and friends. There are no returns. There is no trading room. It is all a scam;

• Marketing of other Forex Services: From signal sellers to automated software to managed funds, you will hear marketing claims designed to get your adrenalin pumping immediately in your veins. Watch Out! There is no perfect system, “Holy Grail” technique, or super efficient fund manager out there. This fact, however, does not stop these folks from selling whatever beautifully sounding service or product offering they have that will revolutionize your trading experience and make you a millionaire over night.

 Did you notice the common thread in all of these scams? Every one of these approaches preys upon our desire to get rich quick. Greed is the motivating factor. If it sounds too good to be true, it most likely is. Forex trading is high risk and difficult. Currency traders must be wary of anyone that pretends otherwise.