My Story With A Lease Buyback Company - Beware Those Of You In Foreclosure!

Hampstead, Maryland (PressExposure) December 10, 2008 -- A MUST READ FOR THOSE IN FORECLOSURE. I've been in the mortgage industry now for almost 14 years and what I'm about to tell you is 100% true. The story is about the inner workings of a "foreclosure rescue" scam artist and how he (and his team) managed to steal more than $8 million in homes and equity from desperate homeowners across the nation. I still can't believe that I almost got sucked into this scam... but I learned a lot and hopefully you will too. (Please note: I'm not labeling all foreclosure rescue companies scam artists, but just the handful of bad apples out there causing massive damage.)

ABOUT 2 YEARS AGO I RECEIVED A FAX AT MY OFFICE FROM A COMPANY IN CALIFORNIA (I'll just refer to them as "Scam Inc." from here on in.) The purpose of the fax was to sell me on the idea of sending them all of my denied borrowers in return for a fee of $1,000 for each client they could refinance. Of course the fax caught my attention because in an average month I was in contact with about 30-50 people who wanted to purchase or refinance their homes, and about ¼ of them were either in foreclosure or very close to it and were getting denied for laons. So I called Scam Inc. and was greeted by the owner, "Mr. Thief".

MR. THIEF EXPLAINED TO ME that he was also in the mortgage business and that he found an investor that was willing to lend money to homeowners in foreclosure when NO ONE else would even consider it. He said that his investor was willing to charge just 7% for a fixed 30 year mortgage, with up to 95% equity level for these homeowners in need. The only catch was the closing costs would be a flat fee of $20,000- regardless of the loan amount. They would pay for the title fees and ALL closing costs out of that $20,000- and anything left over would be their commission. Based on my experience of brokering mortgage loans, I understood that the closing costs on a Sub Prime loan of $400,000 were almost $13,000. It has nothing to do with the origination fees, but just with the size of the loan and the state where the home was located. Heck, title fees alone on a mortgage that size are approximately $3,000.

I ALSO KNEW THAT the ONLY people who would lend money to homeowners in a foreclosure are called "Hard Money" lenders. It's really the last place you want to borrow from. They will only lend if there is at least 25% equity available in the home... and they charge 13% or higher for the interest rate... and it's a 1 year adjustable as well. So this investor sounded like heaven to me. After running the numbers several times I realized that this lender was making an average profit per loan- but not a killing, and that I would make a few dollars per loan, and that the homeowner would get a second chance with a low fixed rate and get saved from eviction- what could be better?

I WAS READY TO START SENDING THIS COMPANY MY LEADS when I was stopped in my tracks, and I remember it like it was yesterday; I was at home on a Wednesday night around 10:15 PM reading the Wall Street Journal as usual. There it was on the 3rd page in bold headlines: "The FBI and IRS have indicted 19 individuals for mortgage fraud related cases. The ringleader, MR. THIEF of SCAM INC. will be arraigned on etc..." You get the idea. I almost hit my head on the ceiling when I saw the headline - I literally jumped off of the sofa. I was just about in tears and thanking the Lord above that I didn't send any of my denied clients over to that piece of garbage - for their sake & mine!

HERE'S WHAT HE WAS DOING: He never even had an investor- it was all a lie. He would tell the homeowner that if they signed over their Deed of Trust to him, he would pay their mortgage for 1 year and they could rent their home back from him at a premium. This would save them from foreclosure and keep them from losing their home. Also, during that 1 year period, he would work on their credit and get them qualified for a new mortgage at a much better rate. After the people signed over the home to him, he would then refinance it under someone else's name (somehow using the signed over Deed of Trust) & pull out all of the equity. Then he would just disappear with all of the money and let the home slip into foreclosure- without making 1 payment. What a nice guy.

HERE'S THE MORAL OF THE STORY: There's no free lunch - anywhere, especially if you're in a vulnerable position like a foreclosure and about to lose your home. People in desperate positions do desperate things because they allow emotions to make the decisions for them, instead of taking a step back & reviewing the situation for what it really is. I allowed that to happen to me -I was so blinded by the potential good this guy promised, that I failed to do a serious background check on the guy for any red flags. For a homeowner in foreclosure, it would have been much worse. I have always run my business in an ethical manner & I continue to follow the Golden Rule, "Do unto others as you would have them do unto you." I also receive 90% of my business through referrals - not many people in ANY industry can say the same. And since that run in with Mr. Thief, I start every new business relationship with a strong background check! We live and we learn.

If you want more solid, real world facts about eliminating your foreclosure, please visit our website - it may just save your home from the auction block!

About www.DIYforeclosure.NET / Platinum Funding, Inc.

Ed Packman has been in the foreclosure prevention industry for more than 13 years now, and has helped over 1,500 hundred families avoid foreclosure and stay in their homes.

These families have been able to continue on with their lives because of the ethical, honest information provided in his e-book, “How to Stop, Stall or Kill Your Foreclosure” available @ [http://www.DIYforeclosure.NET]

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Press Release Submitted On: December 10, 2008 at 3:11 pm
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