Angelenos worried about losing their homes can now go online to report suspected cases of mortgage fraud and abuse, using a web site launched today by the City Attorney's office.
FightingMortgageFraud.org is part of the city's crackdown on predatory real estate companies and loan brokers who deceived -- or are deceiving -- first-time homebuyers and those trying to refinance their mortgages.
Los Angeles residents can use the Web site to submit a complaint to the City Attorney's Office and provide detailed information about their case. Prosecutors will then investigate the allegations to see if action by law enforcement officials is warranted.
"We will seek out and prosecute to the fullest extent of the law those who contributed to our current financial crisis," said City Attorney Rocky Delgadillo, who leaves office at the end of the month.
FightingMortgageFraud.org contains information about protecting homeowners and renters from becoming victims, and has links to county, state, and federal homeowner assistance programs.
The Web site describes three categories of foreclosure "rescue" scams.
The first is what the National Consumer Law Center calls "phantom help," where an unscrupulous broker charges excessive fees for minimal work and promises of assistance that never materialize.
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The second type of scam is the "bailout." Homeowners are persuaded to sign over title to their house, supposedly so that he or she will be able to remain in the property as a renter and be able to buy it back over time.
The City Attorney's Office says the terms of such deals are usually so burdensome that the buyback becomes virtually impossible, allowing a dishonest broker to walk off with all or most of the home's equity.
The third variety is a classic bait-and-switch where a homeowner does not realize that he or she is surrendering ownership of the house in exchange for assistance. The fraud generally involves outright misrepresentations and document forgery.
The homeowner is led to believe he or she is only signing new loan documents. In reality, the documents transfer title of the house from the homeowner to the unscrupulous broker.
