FBI Reports that the Bankruptcy System is used to Perpetrate Foreclo...

A recent FBI Intelligence Assessment describes use of the bankruptcy process in foreclosure avoidance schemes. The foreclosure rescue schemes occur when spurious individuals promise to save a home from foreclosure after a mortgage default in order to extract monthly fees from desperate homeowners. The perpetrators of the fraud then file fraudulent bankruptcy petitions to delay the foreclosure and maximize monthly fees. The Assessment further reports that from 2007 to 2009, US housing inventory increased from 127 million units to 130 million units; US properties in foreclosure increased more than 120 percent; and US home prices declined each consecutive year.