The new year has started off right for consumers. The firm was successful in obtaining a stay of a foreclosure proceeding pending the home of a homeowner who lost the title to their home through a foreclosure scam. The stay was granted by the Circuit Court for Prince George's County, Maryland.

For those who don't know how a foreclosure scam works, it works in one of two ways. Both ways start the same way - a con man contacts the homeowner in distress offering to either help the homeowner pay off the default on their mortgage or arranging a refinancing for the homeowner. The con usually includes a story that they work with someone who likes to help people.

If they are going to catch up the payments, the con man explains that they will catch up the past due amounts and all they expect is that the homeowner will continue to make the payments along with an extra amount each month to pay back the con man for the money paid out to catch up the homeowner's mortgage.  In exchange for helping out the homeowner, the con man asks the homeowner to sign various papers. Buried among the papers is a deed to the homeowner's home.  Once the con man takes the deed they normally try to evict the homeowner shortly after the transaction through a landlord tenant case.

If they are going to arrange a refinancing, the con man arranges for a person, who agrees to act as purchaser,  to obtain a new loan or loans against the homeowner's property. This person is commonly referred to as a "straw purchaser". The straw purchaser most likely has no ability to actually pay any loan back but the straw purchaser does it because he or she is promised a fee of between $5,000 to $10,000. 

The homeowner is told that they need to sign various papers to complete the refinancing. If the homeowner notices a deed in the documents, the con man explains that the transfer is only temporary to allow the homeowner time to clean up their credit. Normally the amount of loans taken out against the home far exceeds what the homeowner owed. The extra money is paid out to the con man and his or her boss. The homeowner is left with a house in the name of a straw buyer and mortgages that exceed the value of the property. The straw purchaser then defaults on the mortgages and the homeowner's home is once again headed for a foreclosure proceeding.