Frauds Common in the US Economy

The US economy is on a tailspin. Unemployment is at its peak. As people lose jobs, even those with excellent credit history are faltering on mortgage payments. Hence, foreclosures have become common.

In the US, frauds related to foreclosures have become common. For instance, five people

in San Fernando Valley have been caught over suspicion of a loan modification fraud case. It has been alleged that 1,500 people have been duped of $2.3 million.
It may be mentioned that four suspects own fraud companies called Gretchen Fox and Associates and Mason Capital Group. The fifth is a salesperson.

Investigation into the deal started last March. It has been established that the companies compelled people into paying extravagant fees of up to $5,000 for loan modification services that never happened. The money went towards payment of school tuition, shopping, entertainment and other expenses.
Brown said, "This company was just a boiler room, long on promises and upfront fees but short on foreclosure relief. Its operators cruelly defrauded citizens trying valiantly to hang on to their homes."

Search warrant was issued to the company’s office. There was a casino with workstations. The four people, identified as Tomer Kogman, Niv Iskin, Reviv Karpman and Avraham Yechizkia had duped the people. They had victimized above 1,500 people. It has been alleged that the four people got n touch with homeowners and promised to reduce their mortgage payments. Of course, that was never done.

The real estate scenario in the US is far from the recovery stage. It may be pointed out that the Federal government had come up with a program to help troubled homeowners. As part of this program, loans of homeowners are being modified first on a temporary basis and then permanently.

The program picked off on a slow pitch but after complaints poured in about delayed responses, the lenders have become very cautious. They are now hastening the procedure.
Experts, however, say that the real estate scenario would only improve after the government creates more jobs. As the employment ratio rises, people would be more comfortable in paying monthly mortgage amounts. A major problem stalking the real estate scenario is that of underwater homes. The value of these homes have dipped so much that people owe more on them than what they are worth. Hence, people find it better to walk out of these homes in order to maintain their good credit scores.

Source