The newest scam targeting distressed homeowners is the “trustee” scam.

THE SCAM:  The scammer convinces you that you can send letters and filings that can eliminate your home loan and the banks’ right to foreclose for non-payment.  In fact, they want you to believe that you can gain free-and-clear title to your home, while wiping out the debt and never making another payment.

They will likely sprinkle in a few Bible verses to convince you that God says it's OK not to pay and try to steal your house from the bank with tricks and deception.

THE CON:  The first thing they will try to convince you is that the bank never actually loaned “money” to you to purchase the property.  They will say that the bank only “extended credit” and that the funds stated to be repaid in the loan are actually “your” money and not the banks.  FACT:  The bank did loan “money” for the purchase of your property.  When you went to closing, the seller received the “money” for the property that your bank advanced on your promise to repay.  There were hard dollars involved.

The scammer will tell you that you can challenge the naming of the "Trustee" in your Deed of Trust.  FACT:  While one can “challenge” anything, you cannot change or revoke it without the bank’s written agreement.

The scammer will tell you that you can challenge the Power of Attorney granted in the Deed of Trust.  FACT:  While one can “challenge” anything, you cannot change or revoke it without the bank’s written agreement.

The scammer will tell you that if you give them a deadline to respond – and they don’t – that the Bank has tacitly agreed with your complaint and argument and becomes bound to your assertions.  FACT:  Nothing could be further from the truth.  NOTE:  When a bank or a trustee gives the borrower a time period to dispute a claim or intended action, it is because there are statutory consumer protection laws that take precedence (are superior to) over simple contract law, which the bank has to follow.

THE DUPE:  Next the scammer will provide you with sample letters and filings, and for a fee (an advance fee from you of typically $2,000 - $4,000) they will help you craft your own letters and filings to your bank.  This is the part where they get paid and you get the shaft.

THE DAMAGE:  Once you stop paying your loan installments, your credit will begin to suffer damage.  Each missed payment and the longer previous missed payments remain outstanding, the credit damage is compounded and compounded.  Each bank and underlying investor (owner of the loan) are different, but eventually they will all take severe action to foreclose, seize your home and evict you and your personal property by police and sheriff force.

By the time you realize you have been taken by the scammers, your credit is totally ruined, your home has been or will be foreclosed on and you will suddenly realize that “you paid them” to get you into much deeper trouble than you ever thought possible.

NEVER PAY ANYONE ANY FEE IN ADVANCE FOR FORECLOSURE AVOIDANCE.