The Consulting Service Scheme
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A firm may offer to act as an agent to renegotiate the terms of a loan with the lender, in return for a fee. The Florida Mortgage Rescue Law forbids such firms from accepting a fee up front, so that is the first sign that you are working with someone dishonest.
The firms are unlikely to have any better negotiation power, so the value of the fee may be disproportionate to the service received. As a matter of fact, the firm may be unable to negotiate any better terms than you, or in the worst cases, may not ever contact the lender.
When negotiation does take place, the firm may put in place a deal to buy the property from the lender, if the equity value of the property has been reduced, then this may be at a lower price than the current outstanding debt. Lenders may accept this to guarantee payment now, rather than gamble on future values, ability of the owner to pay etc. In these cases the situation can be similar to the other schemes with the original owner being offered the option to rent the property with a future buy back. As for the other schemes in a scam situation the terms of any tenancy or buy back may also be set to the gross disadvantage of the original owner.
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As if the misbehavior of Wall Street and the Too-Big-To-Fail Bankers hasn't hurt the American middle class badly enough, we also have lots of "little guy" crooks running around trying to capitalize on people's fear, in order to get them to throw their hard-earned money at whacky ideas which will NOT really keep them in their homes.
This is a place to list such schemes as they rear their ugly heads, to help warn the public away from these fraudsters.
Generally speakiing, Mortgage Rescue Schemes are scams that target those whose home is facing potential foreclosure. The scheme prays on desperate homeowners who are struggling with, or behind in their mortgage payments. These schemes cause difference kinds of harm to the homeowners, but it usually involves the owner ultimately being forced out of their homes, and losing even more money.
The irony is, most of the people who are tempted by these scams could likely have held on to their homes if they had just consulted an attorney experienced in the defense of mortgage foreclosures.
Florida has enacted a Foreclosure Rescue Scheme statute, with tough penalties for those who prey on the fear of homeowners, and fines up to $15,000 per violation.
