Foreclosure Scams

McClatchy Newspapers has a story about foreclosure scams in California’s San Joaquin valley illustrating one of the problems when an area has significant amounts of foreclosures.

Homeowners beware. Just ask Fresno resident Patricia Ireland.

A temporarily laid-off Internal Revenue Service employee, Ireland was scrambling to meet her mortgage payments recently. Out of the blue, a company called to offer help. For a $2,500 fee, Ireland was told, the company and its Irvine-based lawyers would renegotiate the mortgage. Desperate, Ireland paid a $500 down payment.

Then she found the fine print.

“When I read the papers they sent me, they said that until they got the full $2,500, they wouldn’t talk to my mortgage company,” Ireland said.

We’ve had a page about foreclosure scams long before the subprime crisis and credit crisis became any kind of news which indicates the continued problem with people trying to take advantage of distressed homeowners.  I doubt that will ever change, but with the increased number of homeowners facing foreclosure, it’s becoming a larger opportunity for the scammers.  There are legitimate companies in the business of foreclosure prevention, if you are having trouble making your mortgage payments, take the time to understand what assistance companies offer, and research the company background.  If a company doesn’t have an office, doesn’t have any business rating and has only been in business for the last year or so, you really want to think about whether that’s someone you’ll trust with your largest investment.