Bank foreclosure property is at an unprecedented high, ruining thousands of lives and creating an opportunity for some unscrupulous people who take advantage of the desperation of homeowners to save their properties from foreclosure.

The National Consumers League (NCL) has warned homeowners about bogus foreclosure prevention schemes and mortgage fraud. The NCL’s Fraud Center has been tracking fraudulent activities and called on state and federal governments to intensify their consumer education campaign to help homeowners and consumers avoid fraudulent mortgage and foreclosure prevention schemes.

According to data from the Prieston Group, the lending industry incurred an estimated annual loss of $4 to 6 billion due to mortgage fraud. This is because in their desperation to remain in their homes and avoid foreclosure, homeowners would grab any help that comes on their way.

Desperate homeowners would be more than willing to do anything if it means keeping their properties which they have worked hard to acquire. Unfortunately, in their desperation to save their properties from foreclosure, they become careless on whom they are dealing with and often end up losing their money and homes and damaging their credit.

NCL Executive Director Sally Greenberg said that the organization welcomes the efforts of federal and state governments to curb the growing fraudulent mortgage and foreclosure prevention schemes.

However, she believed that intensified enforcement actions to combat fraudulent mortgage and foreclosure prevention schemes will not be enough to prevent homeowners from losing their properties to fraud. She added that the efforts must be combined with consumer education to help homeowners identify and avoid fraudulent schemes.

There are several ways fraudsters commit their bogus mortgage modification and foreclosure prevention schemes. Some may promise desperate homeowners that they will negotiate with banks to scale down arrears or change the terms of their loans. But they will ask for upfront fees for their services. And once homeowners pay the fees, that would be the last time they are going to see the so-called foreclosure prevention expert.

Some con artists operate by promising a homeowner that they would pay his mortgage and lease back his property to him if he signs over the title to them. However, once the homeowner signs the title to the con artists, they will raise the rental fee, sell the house, or worst, evict the homeowner.

These are just some of the fraudulent schemes that distressed homeowners may fall into in their desperation to avoid bank foreclosure property. And NCL believed that an intensified consumer education campaign would go a long way in preventing bogus foreclosure prevention schemes.