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September 2009 Archives

Types of Foreclosure Scams

user-pic By Garrett on September 29, 2009 9:13 AM | No Comments | No TrackBacks

Although the economy is currently showing signs that it is beginning to turn around, there are still many consumers struggling to make ends meet. There is also a lot of tension surrounding an individual or family's ability to continue paying on a mortgage. There are many people on the brink of foreclosure, and many who are in the process of being foreclosed upon. Unfortunately, there are companies and individuals who are scamming these vulnerable persons. There are a number of ways in which this fraud is perpetrated.

 

In one such scam, the rescuer says that if you sign the house over to them, the foreclosure will appear on their record and not against you. Of course, all you're doing is signing your house over, which is what you're trying to prevent from being foreclosed upon in the first place.

 

Another trick is for the rescuer to say that they will cure the default if you pay them money. In theory, this method may work, but there are so many contingencies (not the least of which is whether the company will, in fact, cure the default) that it make the approach very questionable.

 

Yet another fraud is companies who say they will represent you through the foreclosure process. Many such representatives are not licensed and have little or no training. Others simply take the money and run.

 

Finally, another way unscrupulous rescuers defraud people in the midst of foreclosure is to offer to buy the house with the option to buy it back at a later time. The reality here is that you will have a LARGER loan and likely a greater interest rate than your current situation, which makes the likelihood of buying back the home very low.

 

To find our more about foreclosure fraud, see the following links to the Federal Trade Commission and Freddie Mac:

 

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre42.shtm

 

http://www.freddiemac.com/avoidfraud/

 

Lastly, to find out some tips about how to avoid mortgage fraud, see the following Federal Reserve website:

http://www.federalreserve.gov/pubs/foreclosurescamtips/default.htm

Till Irreconciliable Medical Bills Do Us Part

user-pic By Katharine on September 26, 2009 2:03 PM | No Comments | No TrackBacks

The rising cost of health care is taking a toll in unexpected ways.   A recent NY Times Op-Ed article written by Nicholas D. Kristof recounted the story of one elderly couple who divorced when faced with the prospect of her family losing her assets from her first marriage in order to pay off her second husband's long term medical care bills.  The couple, identified only as M. and M.'s husband, were faced with the reality that Mr. M's early-onset dementia could cost them their life savings and then some.  But if instead they divorced, her assets would be protected, some of which she had inherited from her first marriage; her first husband had planned to leave these assets to their children.  Although M. and M's husband  had a prenuptial agreement, that would not protect her assets from his medical expenses.


The social worker assigned to consult with the couple was the one who suggested the idea of divorce and the hospital staff members concurred with the idea explaining, that they had seen it all before, many times, and advised M. to quickly dissolve  the marriage.


This is because for five years after any divorce, M.'s assets could be seized -- precisely because the government knows that people sometimes divorce husbands or wives to escape their medical bills.


M. took the hospital's recommendation and divorced the man she loves instead of wrestling with her husband's mounting health care costs.  Sounds cruel but without their married status she was protecting her and her children's nest egg.   Perhaps in some instances, divorce is a way for couples to stay together happier and more comfortably than if they were married.


M. still helps her husband and, quietly, continues to live with him and care for him. His dementia, ironically, probably makes it easier for him to process what she deemed was the best decision for both of them.


But M. still worries that the authorities will come after her if they realize that they divorced not because of irreconcilable differences but because of irreconcilable medical bills. There were awkward questions from friends who saw the divorce announcement in the newspaper.

 

It was difficult for M to explain the situation to friends and family, since most people don't comprehend how soaring medical costs can result in irreparable harm, including bankruptcy, suicide, and, in this case, unwanted divorce.

 

For NY Times article see http://www.nytimes.com/2009/08/30/opinion/30kristof.html?sq=divorce&st=cse&adxnnl=1&scp=2&adxnnlx=1253901669-Zh73Y8nie83K7vuKfk8WhA

 

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