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Ohio Attorney General announces foreclosure scam indictment

Ohio Attorney General Mike Dewine has announced that a Cincinnati real estate business, known as American Equity Group among other business names, has been indicted on allegations of a fraud scheme that targeted financially distressed homeowners and builders. The allegations charge four people for allegedly working together in a scheme that offered to assist homeowners facing foreclosure to retain the home through the use of a loan fraud scam.

"Foreclosure rescue scams remain a major threat to the financial security of Ohio homeowners, and we are committed to doing all we can to put an end to this type of fraud. These operations make false promises to vulnerable homeowners and take money without providing any real help," says DeWine.

The indictment alleges the group would locate distressed homeowners or builders and offer to find so-called investors to temporarily purchase the home, saving the home from foreclosure. The original seller then would rent the home from the purported investors for a period of time, according to the indictment. The rent money would be use to pay the mortgage, according to the indictment.

The scheme allegedly included a promise that the original seller could buy the home back after a short period of time from the investors. The problem, according to the indictment, is that the home would be stripped of equity in the scheme and the home would soon be back in foreclosure proceedings. The original distressed homeowner would have no rights in court, because the victim had sold the home in the scam, according to the indictment.

The accused group allegedly obtained roughly $13 million in fraudulent homes under the scheme. Many experts believe that financially distressed homeowners can be vulnerable to foreclosure and credit repair scams. Ohio residents suffering under tough debt loads in this troubled economy can speak to an experienced bankruptcy attorney to learn what options may be available under the bankruptcy code to find debt relief and potentially save a home from foreclosure.

Source: National Mortgage Professional Magazine, "Ohio AG DeWine Announces Foreclosure Rescue Actions," Aug. 26, 2011

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