New article on Foreclosure Rescue Scams
Posted by steele in minnesota on January 27, 2009 at 05:20:01:Foreclosure swindlers prey on desperate
Publisher: The Columbian, Vancouver, Wash. (Author: John Branton)
Jan. 25--Foreclosure swindlers are promising to help people keep their homes and taking $1,000 or more up front -- and doing little or nothing as the foreclosure proceeds.
But there's good news, too: You can learn how to save your home for free.
Foreclosure rescue scams, which target people who are desperate and have little money, are being reported in the thousands all around the U.S.
The swindlers typically pose as legitimate companies, using logos, forms and other business practices that appear convincing or even government-affiliated, officials say.
Some telltale signs, however, are promising to save a home that may or may not be saveable -- and taking money up front.
A Jan. 14 story on The New York Times Web site, www.nytimes.com, said several states including Illinois now ban up-front payments as a result of such complaints.
In Washington state, Attorney General Rob McKenna filed actions against two companies based in Florida that allegedly targeted Washington residents with the schemes.
"More than 70 percent of homeowners who signed up with Foreclosure Assistance Solutions ended up losing their homes anyway," according to the AG's Web site, www.atg.wa.gov.
The company agreed in a settlement made public in April to pay about $78,000 in partial restitution to about 200 Washington customers, pay $20,000 in attorney fees and change some of its business practices.
Foreclosure Assistance, which admitted no wrongdoing, also agreed to pay another $100,000 in civil penalties if it violates the settlement terms. It's no longer in business.
United Home Savers also admitted no liabilities and now is out of business. But in a settlement last fall, the operators promised to stop such activities.
The problem is fraught with ironies, including the fact that signing a contract with such a company can tie your hands as the foreclosure process unfolds, officials say.
That could result in losing a home that might have been saved.
"What's really kind of nasty is the contracts prohibit the consumers from contacting the mortgage company that initiated the foreclosure," said Kristin Alexander, a spokeswoman for the Washington AG's Office.
She added, "Many of the people did, in fact, lose their homes."
If the homeowners hadn't given their little remaining cash to the companies, and if the homeowners had taken action themselves in time, some might have saved their homes.
Step 1 to keep your home
The first thing distressed homeowners should do is to contact their mortgage holder, even if the holder changes as loans are peddled back and forth.
"You need to know who owns your loans," Alexander said.
The most recent mortgage holder should have notified you by mail, and your house payments or automatic withdrawals should say where they are being sent.
"The bank should have a customer service number," Alexander said. "It should be in your loan papers."
In another irony, a wealth of easily understandable information about exactly how to proceed is available free from the state Department of Financial Institutions.
The DFI's Web site, www.dfi.wa.gov, contains a partial list of mortgage lenders, with phone numbers and Web sites.
You also can call a toll-free number, 877-894-4663, to get the same information.
DFI also provides a list of state-approved home-loan counselors around the state who participate in the free program.
There's a form to fill out, listing assets, monthly income and expenses, that will help the counselor assess your situation.
And you'll find a list of options for homeowners facing possible foreclosure:
-- Ask your loan holder to lower or suspend your payments temporarily, if you'll be able to resume payments later. Not all lenders want another foreclosure.
--If you were laid off and got behind on your payments, but now
Follow Ups:
- Re: stay involved - NJD 06:21:07 01/27/09(0)
-->
