WA A.G. Pushes Crackdown On Foreclosure Scams

GOVERNMENT 

By Austin Jenkins

Olympia, WA  January 3, 2008 4:02 p.m.

Some people facing foreclosure on their homes are falling victim to a scam. And Washington’s Attorney General says it’s time to crackdown. Olympia correspondent Austin Jenkins reports.

Here’s how the scam typically works. A con artist persuades homeowners on the verge of losing their house to sign over title of the property.

In exchange the homeowners are allowed to lease the property so they can stay in their house. They’re told they’ll get the title back when they’re back on their feet financially.

Rob McKenna: “And then what they do is let the property go into foreclosure anyway and they take the equity out of the property leaving the homeowner or property owner with nothing.”

It’s called equity stripping.

Washington Attorney General Rob McKenna, a Republican, says California and other states have taken steps to protect homeowners from this scam. He wants Washington to follow suit.

McKenna is asking the legislature to pass a bill this year that would ensure homeowners collect 82 percent of the equity if their home is sold to a third party.

The proposal is one of several consumer protection measures the attorney general is pushing for the upcoming legislative session.

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© 2008 KPLU