Falcon is exactly right for the vast majority of those facing foreclosure. They haven't been defrauded by their lenders: they stopped making their payments. And there isn't a lot that an attorney can do for those people other than procrastinate the inevitable. But in cases of true fraud, what a person really needs is title insurance, not an attorney. I see it constantly in my business, unfortunately. One of the many scams I'm seeing involves unconscionable people in default who record a fraudulent deed of trust against their property, naming bogus parties like The Financial Recovery Group, as trustee, and Real Property Investors, an unincorporated association, as beneficiary. This makes the chain of title look like the owners in default managed to refinance the defaulted deed of trust. Shortly thereafter, they file a fraudulent rescission of the notice of default and a reconveyance of the genuine deed of trust. Two months later, the bogus beneficiary conducts a short sale and some undereducated title examiner working for a title company doesn't have the wits to recognize the pattern or to question why the beneficiary is conducting a bloody short sale two months after funding the blickety-blank-blank loan. (I'm trying to keep my temper in check here because this subject infuriates me.) So the examiner sees the recon in the chain and blows off the defaulted loan without questioning it, and then the crooks sell the property to the unsuspecting buyer and race off to Jericho with the sale proceeds. The buyer moves in and a short time later the original beneficiary on the true deed of trust forecloses and evicts the buyer. But the victimized buyer doesn't hire an attorney. He tenders a claim with his title insurance company, and the title company ends up sending the buyer a check for the full price of the property. This kind of fraud, I'm sad to say, is rampant. And while you can blame the title companies when they fail to spot the fraud in time to stop it, the fact is, lay people have great difficulty recognizing fraud when it's happening because so many of them just don't have the education and the critical thinking skills that come with it to decipher when a con game is in progress.
In sum, victims of fraud often don't need attorneys. They just need title insurance from a financially sound title company. Those who would invest money in real property without buying title insurance assume a heck of a large risk.
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