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02/22/10

5 Sentenced for Foreclosure Scam in LA Fed. Court

On February 17, 2010, U.S. District Court Judge George King of the Central District of California sentenced five people to prison terms for their roles in a foreclosure rescue scam that stripped over 100 distressed homeowners of more than $12 million in equity.  The convicted scammers' victims were trying to avoid foreclosure but ended up losing their homes after having surrendered title to their homes to the scammers.

Edward Seung Ok, characterized by the judge as the worst offender, was sentenced to a term of 15 years.  Other perpetrators received sentences of between one and three years in prison.  The U.S. Attorney's Office for the Central District California brought the case.

Equity-stripping scams are a type of foreclosure rescue scam that was especially common prior to the collapse of the credit market.  Unscrupulous opportunists may still attempt to defraud distressed homeowners of their equity through this type of scam to this day but now find it more difficult to fraudulently obtain loans against homeowners' properties.  Homeowners seeking to avoid foreclosure should never sign any document transferring title for their property to an individual or business claiming to be able to prevent foreclosure.  Legitimate foreclosure prevention counseling is available for free from HUD-certified housing counseling agencies.  Please visit our Get Free Counseling page for information on obtaining free help. 

For more information, read the San Jose Mercury News article, "5 Sentenced for Foreclosure Scam in LA Fed. Court."