Washington, like most other states, is beset with scams to cheat homeowners out of the equity in their homes. With rising interest rates and increasing signs of economic downturn the number of foreclosures is rising at a startling rate. On a significant scale criminals are taking advantage of distressed homeowners by offering means of escaping foreclosure that promise retention of the family home. Most commonly these scams involve deeding title to an “investor” who leases the property back to the home owner with “an option to purchase.” Sometimes these scams just involve vague promises of refinancing, then after obtaining the personal information from the consumer’s loan application, forging a deed. These criminal practices, behind a veneer of “professional assistance,” are epidemic throughout the county.
Several states have passed legislation aimed at curbing these crimes and the Washington State Attorney General this week proposed that similar legislation be passed in Washington. The proposed legislation includes notice requirements and a five day right of rescission but most significantly requires that the homeowner receive 82% of the equity in the event that the property is sold to a third party.
This ought to serve to curb the problem, but it would be very useful if there were enhanced prosecution of these criminals as they are largely under the radar of state and local prosecutors.