Though tales of booming housing markets have pushed foreclosure horror stories out of the headlines, the problem persists in those stubborn pockets of the economy still mired in crisis. That includes California, which has seen a dramatic turnaround in the past year, but where rapid growth — followed by a high rate of unemployment second only to Michigan — still leaves many homeowners in economic distress, and vulnerable to schemes that promise to rescue them from default.
Suspected to be among the most successful there was one that preyed on homeowners across California by claiming to put them in touch with investors willing to purchase their distressed properties. The mastermind of the fraud, Jewel Hinkles (right), swindled an estimated 1,300 hundred victims out of about $5 million through a network of companies, with names such as Save My Home and Pacifica Group, in locations including Beverly Hills and suburban Sacramento.
“We have prosecuted quite a number of these and by their nature they have large numbers of victims,” U.S. attorney Benjamin Wagner told Sacramento TV station KCRA. “But this is certainly among the worst of these kinds of cases that we’ve seen.”
Even though Hinkles eventually was convicted in the case, many of her victims remain in her grasp and unable to sell their homes — and still at risk of losing them — because Hinkles’ name is on the deeds to those properties.
And they’re finding it much more difficult to get her name off the deed than it was to put her name on.
From one of AOL Real Estate’s guides on avoiding fraud, here are some ways to avoid being victimized in a foreclosure-rescue scam in the first place:
o. The golden rule of avoiding fraud: If it sounds too good to be true, it probably is. Remember that foreclosures are public information, so details about them can easily be gotten by scammers who will use that knowledge to misrepresent themselves as able to rescue homeowners in distress.
o. Avoid foreclosure counseling companies that solicit business with fliers or by going door-to-door.
o. Know what you’re signing. A common “bait-and-switch” involves documents that purport to applications for a new, more-affordable home loan but that actually surrender the home’s title. Also, don’t sign any blank forms or allow forms to be filled out for you.
o. Resist pressure tactics. As seen in the video, one of HInkles’ victims describes being rushed to come to one of her offices to sign papers, under the threat of foreclosure.
o. Be wary of the rent-to-buy scam. Represented as a refinance at a lower rate, it actually involves a transfer of deed from the homeowner to the foreclosure counselor, and the homeowner unknowingly becoming a renter and subject to eviction.
o. Talk with a state board licensed attorney before signing anything that transfers the title of your home to another party.
o. Work only with HUD-approved counselors. Consult the Department of Housing and Urban Development’s list of approved agencies, or call 877-HUD-1515 for more information. o. Don’t work with a counselor who collects a fee before services or who accepts payment only by cashier’s check or wire transfer.
o. Hire licensed attorneys to represent you. Check with your state bar association to see if the person is licensed to practice in your state and is subject to any pending investigations. But still attend court hearings about your property and get your court file number so you can obtain copies of documents at the courthouse or check the case’s status online.