Community Dividend

NCLC warns of foreclosure "rescue" scams

Published September 1, 2005  |  September 2005 issue

A recent report from the National Consumer Law Center (NCLC) warns of widespread scams that rob vulnerable consumers of their home equity. In Dreams Foreclosed: The Rampant Theft of Americans' Homes Through Equity-Stripping Foreclosure 'Rescue' Scams, the NCLC describes practices in which scammers aggressively market financial "bail-out" or "rescue" services to homeowners in foreclosure. They then use high-pressure sales tactics to persuade the homeowners to unknowingly sign away their equity or ownership. The deals are designed to be overwhelmingly complex and often involve fraud and the forgery of deeds. The report, available at www.consumerlaw.org/news/ForeclosureReportFinal.pdf, highlights scam activity and legal responses in selected states, including Michigan and Minnesota.

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Narayana Kocherlakota

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