How to spot a foreclosure prevention scam - CBS46 News

How to spot a foreclosure prevention scam

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A lawyer promising to rescue homeowners on the brink of foreclosure is now charged with stealing their money instead.

"Right now, we're waiting for a knock on the door from the sheriff's office to tell us to get out of the house," said fraud victim Jeff Lyon.

He and his family are hoping to hold on to their home after getting duped in a bankruptcy scam.

 

"When the economy took a dump on everybody, we fell behind on our mortgage. I was also hurt at work. I was in a coma for a month and a half. When I got out of the hospital, we were too far behind and the bank wouldn't work with us anymore," Lyon said.

He turned to Philip Igoe, an attorney who worked with clients facing foreclosure. Igoe offered to help by filing for bankruptcy protection or a loan modification. But first, his team would need an up-front fee - usually about $500.

"They were also asking the victims to pay the mortgages to the attorneys and he would forward the money to the mortgage company," said US Postal Inspector Brett Leonard.

But Igoe never forwarded the money to the mortgage company. He kept it for himself.

"How do you go to your kids and tell them you have to move out of the house you grew up in because I lost it," Lyon said.

Postal inspectors say 15 people were caught in Igoe's scheme and there were hundreds of thousands of dollars in losses.

"This was a very specific scam; I would suggest consumers seeking doctors or lawyers look at the regulatory websites to see if there have been any prior disciplinary actions to the people they are seeking business from," Leonard said.

Lyon had this advice: "Don't trust anybody. Get everything on paper. Everything. Double check everything they are doing."

If you think an individual or company is running a mortgage foreclosure scam, contact your local office of the United States Trustee. The United States Trustee is a justice department official who monitors the bankruptcy system.

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