"This woman lost her house, and so did her daughter, and they gave the perpetrators $12,000, and their homes are still on the block," said Solano County District Attorney's Office investigator Sonny Ash.

It's part of a rash of kick-'em-when-they're-down schemes aimed at defrauding people desperate to save their homes, he said.

"Most of the victims we find are Hispanics with limited English." The criminals are also primarily Hispanic, he said. "It's the trust issue, and the language." They're vulnerable because of the same things that contributed to their getting into bad loans in the first place, Ash added.

To help combat the growing problem, Solano County officials are sending warning notices along with notices of default to homeowners who have gotten behind in their house payments, Ash said. The warnings are in English, but officials are working on a Spanish version, he added. The DA is also aggressively prosecuting real estate scammers, Ash said.

Realtor Jeff Dennis said he's heard anecdotes of such scams,

"I have heard of people who convince property owners they can save them from foreclosure, who then refinance the property, take the equity and the people still lose their home," Dennis said.

The latest version of the foreclosure scam has hit several surrounding counties, including Napa, officials said.

The perpetrators contact property owners who have gotten a notice of default - the first step in the foreclosure process - which is public record, Ash said.

The scheme is supposed to work by having the owner grant a small interest in the property to a sham business entity and pay a monthly fee. The fractional interest owner then files bankruptcy for the sham business to stop the foreclosure. But the bankruptcy is found to be fraudulent, the foreclosure continues, and the owner loses the property and the fees they paid the scammer, Ash said.

The Alameda County District Attorney has reportedly brought charges against two people who have targeted property owners in Alameda, Fresno and other counties, including Napa. The U.S. Attorney in Sacramento has indicted 19 people on similar charges. The United States Trustee office and the state Attorney General are also investigating this scheme, authorities said.

"We have gotten calls from people who have been approached for this scam, but no complaints from anyone who's fallen for it," Ash said. "We have had complaints from property owners who have been scammed by people doing a similar thing, but without the filing bankruptcy."

Ash said those facing foreclosure should contact their lender, not its collection department, to negotiate to save their homes. And there may be agencies that can help, but telling the difference between the legitimate and the criminal ones is very difficult, he said.

Anyone who thinks they've been targeted for this type of scam is urged to contact the district attorney's office or their local police department, Ash said. Officials in other counties are taking a similar approach.

"We urge property owners who are approached by perpetrators of this scheme to contact the Consumer Affairs Division of the Napa County District Attorney's office," said Napa County District Attorney Gary Lieberstein who is working with County Recorder John Tuteur on this issue.

By RACHEL RASKIN-ZRIHEN/Times-Herald staff writer

http://www.timesheraldonline.com/ci_8943809