Foreclosure Rescue Schemes & Scams
August 11, 2022
By Diane Drain Attorney & Retired Law Professor
It’s extremely unlikely that someone will contact you with an offer to “fix your problems” without making a lot of money or taking title to your house.
The majority of these folks are in the business of profiting from your misery. As long as you understand their aim, you are free to do whatever you choose. Hundreds of people have been led to believe that these “rescuers” are their friends. Never make that mistake again. Check for prior litigation with the Attorney General’s Office, the Better Business Bureau, the Clerk of the Court, and Google their name.
If they claim to be a non-profit, be skeptical. If they claim to have federal “grants,” be skeptical.
Keep track of everything you do with them. Keep copies of all documents and videotape their pledges. Always read anything you sign before signing it, and maintain a copy of everything. Before you sign, seek advice from someone who isn’t connected to the rescuer.
The majority of these scams target minorities, individuals with low income who can’t afford to speak with an attorney, and those who are simply too obstinate to believe that anyone could possibly defraud them.
Attorneys, disbarred lawyers, realtors, brokers, and CPAs are just some of the people who have prayed on innocent people. Richard T. Berry, a convicted felon and disbarred lawyer, is an example. “Why Pay a Lawyer” is run by Mr. Berry. He is not allowed to practice law in Arizona, and he is not allowed to prepare any documents. But he continues to work in Arizona, even from the Arizona State Prison. Mr. Berry numerous sanctions by Arizona bankruptcy judges on multiple occasions.
Never put your trust in anyone to “work out your problems.”
The moral of these stories is to always verify with licensing organizations to determine a person’s current status and past history before hiring them. People in distress, in my experience, wait far too long to seek assistance. When they do seek assistance, they do not check the reliability of the helper’s background or the veracity of their assertions. Maintain direct contact with your lender. No contract with an attorney should prevent you from speaking with another attorney or seeking counsel from someone else for your case. If you have any questions regarding an attorney’s behavior, contact the Arizona State Bar.
Bankruptcy is not always the best option.
To learn more about your choices, speak with an expert bankruptcy attorney. Even if the house sells in a trustee’s sale, it’s likely that the Olsens will collect some money when the trustee’s sale is done. See below for an explanation of excess sales revenues, which are funds left over after a trustee’s sale.
If you are asked to do something that you believe is unethical or illegal, refuse.
This is one of hundreds of such stories: in early 2006, Maria E, an elderly woman, used her own money to put a down payment on a $175,000 house, and then made all of the bills and landscaping. Initially, a realtor and a mortgage firm proposed that she utilize the credit of a friend of the realtor to acquire the house in order to qualify for the loan (she was living on social security). (This is referred to as FRAUD by those who are paying attention.) The residence was bought in the name of a friend of the agent. After the financing was funded, the realtor’s acquaintance promised to convey the house to Maria. Maria thought the house had been deeded into her name after she paid the down payment and made all the payments for a while. Instead, it turned out that the buddy deeded the house to an investor, who subsequently evicted Maria and deeded the house to another investor.
Keep in mind that these people are in the business to make money. They are profiting off the equity in your home that you are losing.
About the Author: Diane Drain
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
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