Troubled homeowners, beware of ‘mass joinder’ lawsuit invitations

As some of you know, I was appointed last year to the Orange County District Attorney Real Estate Fraud Advisory Committee.  We meet at the D.A.’s office quarterly to discuss real estate fraud trends and how to protect the consumer and catch the perpetrators.  The article below touches on one of the current frauds that has hit Orange County.

What financially strapped homeowner wouldn’t want to join other troubled owners in a last-ditch effort to save their homes from foreclosure? But beware of unsolicited mailings inviting your participation in a “mass joinder” lawsuit as a way to do so.

Mass joinders can be just another way to separate desperate borrowers from their money — as much as $5,000 or more in upfront fees, according to the St. Louis Better Business Bureau. The bureau warned earlier this year that the mailings are the latest twist in scams that promise to force lenders to modify the loans of borrowers who no longer can afford their house payments or who owe more than their homes are worth.

Now, California has sued 14 entities, including several law firms and individual attorneys, accusing them of working together to defraud perhaps millions of people nationwide through the deceptive marketing of mass joinder lawsuits.

It is believed the defendants sent about 2 million pieces of mail to homeowners in at least 17 states. It is not known how many borrowers fell for the alleged ruse, but the California Department of Justice estimates the defendants’ take from the operation to be in the millions of dollars. 

To read the rest of the article.  Click below:

http://www.latimes.com/business/realestate/la-fi-lew-20110925,0,448398.story

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