Homeowners in Michigan and across the US have been scrambling to keep their homes in these uncertain economic times. For many of these individuals, their home represented not only the place they lived, but also their largest financial investment. The reality of the housing market collapse brought the dream of home ownership to an end for many. Not only is there no return on their investment, but any equity they may have had was lost when the market bottomed-out. That is not the case, however, for foreclosure scam artists.
These individuals meet before foreclosure auctions and agree on one buyer per property and what price will be offered. Then the ‘bargain hunter’ appears at the sale on courthouse stairs and wins the fixed auctions. After the sale they meet again, often right out in front of the same courthouse, and hold a private auction for prices that are closer to fair market value. They then split the profit made between the first and second auctions.
Federal investigators have been aware of this practice for a long time. Prior to 2008, a home in a fixed auction would net a scam artist upwards of $5,000 on each property. However, the recent boom in foreclosures coupled with the depressed market values of the properties has made this bid-rigging a highly profitable scam. In recent years, federal prosecutors have rounded up several people and two companies in three separate states. These scams were hurting the homeowners who were already in difficult financial situations.
How can Michigan homeowners who may still be struggling avoid becoming victims in this kind of scheme? There are legal tools available that can help if you are behind on your mortgage and can often stop a foreclosure that has already been initiated by the mortgage holder. Being aware of your rights and the options available can keep your home off the auction block and out of the reach of scam artists like these.
Source: Huffington Post, “Foreclosure Auction Scams Face Federal Crackdown,” Paul Elias, June 1, 2013