Foreclosure Scams|Are a Growth Industry

(CN) - More than 500 people were charged with foreclosure-rescue scams nationwide in the past year, federal prosecutors said, and they are believed to have suckered more than 73,000 homebuyers for more than $1 billion.

Attorney General Eric Holder announced the results Tuesday in Washington, D.C., and the U.S. Attorney's Office in San Diego followed up with a statement about activity in that area, where 15 defendants were accused of swindling homebuyers of more than $12.5 million.

The Justice Department's Financial Fraud Enforcement Task Force's Mortgage Fraud Working Group brought 285 cases nationwide from Oct. 1, 2011 to Sept. 30, 2012, seeking more than $1 billion in restitution for more than 73,000 homebuyers.

In a typical foreclosure rescue scam, the crooks promise to prevent or delay foreclosure, or reduce the debtors' obligations, for an upfront fee. Often they give bad advice, such as to stop communicating with the lender, and the homeowners lose everything. Or they offer to take title to the distressed property and lease it back to the confused victim, sometimes remortgaging it, waltzing with a second bank loan and leaving a snarl of paperwork behind.

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