Thursday, September 17, 2009

Don't Pay for Foreclosure Help - Avoiding Rescue Scams

With foreclosure filings reportedly reaching record numbers this summer, Family Services, Inc. reminds homeowners in danger of foreclosure that they should never pay for help, and should instead seek assistance from HUD-approved nonprofit housing counseling agencies, like Family Services, Inc., and those found at www.findaforeclosurecounselor.org and www.makinghomeaffordable.gov.

“Rescue scams are proliferating at a rapid pace and more homeowners are falling prey to the slick advertising and sales pitches that guarantee to keep them in their homes,” said Debbie Kidd, Director of The Homeownership Resource Center, a division of Family Services, Inc., a local NeighborWorks organization.

Foreclosure rescue scam artists frequently demand upfront payment for their services and “guarantee” to modify, refinance, or reinstate a borrower’s mortgage. The payment demanded can be anywhere from $1,000-$5,000, as was the case for one homeowner in South Carolina. The Homeownership Resource Center, located in Charleston, South Carolina recently worked with a homeowner who was bilked out of more than $2,000 by a company that promised to work with the borrower’s lender to reinstate the homeowner’s mortgage. In reality, the company did nothing and the home was sold at auction. Even worse, the homeowner had no idea until a notice to vacate the premises came from an attorney. Now, the person is left with no home and lost more than $2,000 in the process.

“If you are facing foreclosure, do not pay any person or company up front for services,” said Kidd. “Homeowners facing foreclosure need to be aware that foreclosure rescue scam artists are out in full force and see this as a prime opportunity to make money. When it comes to foreclosure assistance, the old adage ‘you get what you pay for’ does not apply. If you are facing foreclosure, contact a HUD-approved nonprofit housing counseling agency, like Family Services, Inc., to receive foreclosure counseling. Nonprofit organizations are a homeowner’s best defense against foreclosure.”

Family Services, Inc. urges homeowners not to pay a person or company for foreclosure help, and offers borrowers the following tips to avoid foreclosure rescue scams:

• Never use any ad, person, or company that approaches you and claims to be able to “stop foreclosure now” for a fee.

• Never release your financial information online or over the phone to a company you know nothing about.

• Never send your mortgage payment, or any payment, to a company other than your mortgage lender.

• Visit www.findaforeclosurecounselor.org to find HUD-approved organizations that offer free, legitimate foreclosure counseling.

• If you prefer to speak to a counselor over the phone, call the Homeowner’s HOPE Hotline at 888-995-HOPE (4673) for free foreclosure prevention counseling by expert counselors at HUD-approved nonprofit counseling agencies. The hotline is open 24 hours a day, seven days a week, in English and in Spanish. Counseling is also available in 20 additional languages by request.

• Contact your mortgage lender. Contrary to what a foreclosure scammer will tell you, you should contact your lender the minute you have trouble making your monthly payment.

• If you suspect a scammer has approached you or victimized you, contact your local Better Business Bureau or state attorney general’s office. In addition to reporting a scam locally, you can file a complaint with the Federal Trade Commission (FTC). To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant: https://www.ftccomplaintassistant.gov/ or call 877-FTC-HELP (877-382-4357).

For more information about foreclosure prevention, or to make an appointment to meet with a counselor, please contact Debbie Kidd, dkidd@fsisc.org, 843-735-7860.


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  2. I recently came across your post and have been reading along. I thought I would leave my first comment. I don't know what to say except that it caught my interest and you've provided informative points. I will visit this blog often. Thank you.

  3. Your tips and guidelines here are surely helpful! Wherever there are people in financial difficulty there will be con men and scammers eager to pick up the pieces and take what little you have left. They prey on people’s fears and problems. Even some “reputable,” financial institutions are a party to these sort of scams. These scams vary from overpriced loans to some situations where you will find yourself evicted from your property and still responsible for the debt or worse, renters in your own home.