A lot has been covered recently about how mortgage fraud was used in the purchase of rapidly appreciating properties in many market around the country with the expectation that everyone would cash out so it didn’t really matter if the numbers were fudged.  In a story from the Mercury News , the news is starting to cover one of the next scams that come to be when markets turn.

“Fourteen homeowners were told to pay a fee up front and then $1,500 to $2,500 every month to keep the house out of foreclosure and were reportedly told to fill out a grant deed that deeded a fraction of the property’s interest to various companies. Unbeknownst to the homeowners, the companies did not actually exist, the district attorney’s office contends.”

While not everyone who seeks to assist homeowners in default is a scammer, close attention needs to be paid to the details of any potential transaction involving a property in default.  Emotions run high, and the simple choice of just relinquishing the problem for someone else to work out can be tempting, but it’s often not in the best interest of the homeowner.  Sadly, I think the problems are going to get far worse and the scams more involved as we work through this cycle.  Solutions?  I have none, just be careful what you sign and learn as much as you can before you do sign any real estate related paperwork.