There are many different kinds of mortgage foreclosure scams. One is called a “fractional interest transfer” and here is how that one works. When a homeowner files for bankruptcy protection, the law provides for an “automatic stay.” That means that no creditor can take any legal action (including foreclosure) against the debtor without getting Bankruptcy Court approval. This is referred to as a “lift stay.” The home owner pays a monthly fee to the “foreclosure specialist.” In return, that specialist arranges to transfer a small percentage of the homeowner’s property to a person who is already in bankruptcy. According to a Bankruptcy Foreclosure Scam Task Force out of California, often the entity in bankruptcy is fictional. And while the homeowner cannot be foreclosed upon because of the automatic stay, in the end that consumer has conveyed some or all of their home to the scam artist. The Complete Guide to Investing in Foreclosures

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