The personal and economic devastation caused by the collapse of the housing market has been well-documented.
While some might debate the role of the various contributing factors, there is no denying that dreams have been shattered and lives have been turned upside-down. Many people who did not cause the housing disaster have been stung by its consequences.
Builders, electricians, plumbers, and many other people who were employed in related fields have found themselves struggling to survive, as housing prices plummeted and excess inventories brought new home construction to a standstill.
Employees in many fields who have lost jobs, had wages frozen or cut, or hours reduced in the wake of the economic downturn have been forced to adjust to a new standard of living.
Despite all of this, Americans are resilient, and people soon began to put their lives back together.
Many who were still in their homes fought to stay in them.
Into this arena of fear and uncertainty slithered a slimy breed of shysters and scoundrels so contemptible one finds it difficult to find suitable words to describe them.
Playing upon the fears of those facing the real possibility of losing their homes, and preying on the most vulnerable among us, these vultures exploited the misfortune of others to make a quick profit.
Struggling homeowners who desperately grabbed for what they thought was a lifeline have found themselves dragged deeper into the abyss. Instead of a helping hand, they encountered hands that were poised to snatch their savings, their homes, or both.
The number of complaints received by the Federal Trade Commission (FTC) provides a simple illustration of the explosion of mortgage foreclosure scams.
The FTC received only one complaint of such a scam in 2008.
During 2009, a total of 7,927 complaints of mortgage foreclosure scams were filed.
Many of these scams use documents that make them look legitimate.
The crooks design forms to look like government documents, and some use names such as “Federal Loan Modification Bureau” that make them sound official.
It might be easy to dismiss the problem and say the people who are facing foreclosure should not have overextended themselves, or should not have purchased houses they cannot afford.
The reality, however, is that the scams and foreclosures affect all of us.
According to the Joint Economic Committee of Congress, if we include the cost to homeowners, neighbors, cities, and lenders, each foreclosure costs $78,000.
In cities across the country, neighbors are faced with looking at overgrown lawns surrounding homes where families once lived.
Property values decline when foreclosed homes begin to dot once-thriving neighborhoods.
Cities (and taxpayers) shoulder the burden of police and fire protection for vacant homes.
The people who commit mortgage foreclosure scams are committing crimes not just against individuals, but against communities.
It is at times like this when one wishes our criminal justice system was more flexible.
It is a shame that pillories have fallen out of fashion, and tarring and feathering fiends before running them out of town on a rail is no longer considered acceptable.
One can imagine all sorts of creative penalties that would be suitable for those convicted of mortgage scams.
These penalties could be as simple as requiring the perpetrators to spend their days mowing lawns and maintaining vacant properties to improve the appearance of neighborhoods affected by foreclosures.
Picking up trash and cleaning up graffiti on vacant homes would also be useful jobs for these scammers.
Having these vultures sitting in a jail cell does nothing to help the community, but forcing them to work in the areas they damaged could provide a benefit.
However, dealing with past offenses is only part of the answer.
The only way to prevent scams from contributing to more foreclosures in the future is to educate homeowners.
One initiative intended to do this is “Look Before You Leap,” a statewide education campaign initiated by the Minnesota Home Ownership Center, in partnership with other agencies.
Free help is available to homeowners facing foreclosure. Wright County Community Action is one agency that provides free counseling to homeowners. The sooner people seek help, the more options are available.
Consumers should beware of any entity that charges a fee for service.
Other warning signs include:
• companies that ask homeowners to sign over title to their home or power of attorney;
• companies that tell homeowners to stop making mortgage payments during the loan modification process;
• companies that tell homeowners to pay them, rather than the bank; and
• companies that promise a guaranteed outcome.
More information, including a list of organizations that provide free counseling to homeonwers, is available at LookBeforeYouLeap.org.