Tips to avoid falling victim to foreclosure rescue scams
What to do and what not to do when facing foreclosure
They'll take your last dime and leave you out in the cold.
We're talking about foreclosure rescue scams. Bad guys all across the country are taking advantage of people when they are most vulnerable -- about to lose their home.
State Attorney General Rob McKenna says foreclosure scams are a growing problem.
"The FBI has reported a 63 percent increase in mortgage fraud cases that they are investigating," he said. "And we also know with a lot of pay option adjustable-rate mortgages coming due, that we can expect another round of rescue scams and loan modification scams."
McKenna says his office has also seen an increase in advertisements for loan modification scams "in every manner and description of ad and come-on to people trying to persuade people they need help modifying their loan."
Some scams advertise what is called a payment reduction.
"What they're claiming is that if you pay them, they will help you obtain a lower interest rate, a longer pay return period and so forth," McKenna said. "And they're capitalizing on the fact that there are legitimate loan modification programs out there, including some that our office has helped arrange. So people are confused."
So how do you know which programs are legitimate? The following tips from the Attorney General's Office will help you avoid becoming a victim.
Dos:
Contact your lender yourself
"As many as half of the people in foreclosure problem never contact their lender," McKenna said. And that's a mistake.
Get free advice from a housing counselor
McKenna says you can find plenty of government-certified counselors who offer their advice for free by visiting the state's Web site or by calling 1-877-894-HOME (1-877-894-4663).
Verify a loan modification business is licensed
You can check them out on the Department of Financial Institutions' Web site or by calling 1-877-RING-DFI.
Talk to an attorney
"Spend a few dollars and hire someone who knows what they're doing before you sign anything that commits you to pay thousands of dollars," McKenna said.
And now that you know what to do, let's talk about what not to do.
Homeowners in need of legal help who are unable to afford a lawyer should contact the Home Foreclosure Legal Aid Project. Call 1-877-894-HOME (4663).
Don'ts
Pay upfront fees for help
"That's always a tipoff they're trying to rip you off," McKenna said.
Ignore your lender
You should always work with your lender. Don't believe anyone who tells you otherwise.
Transfer your title
The attorney general says, "Please, please, do not sign over the title to your property against the promise that you're going to get help in the future."
Make your mortgage payments to someone else
You should only be making payments to your lender.
Sign documents without reading them
This is never a good idea.
"Take a few days, several days," McKenna said. "Get someone knowledgeable to read them with you, like a realtor or a lawyer."
For more information:
AGO Foreclosure and Mortgage Assistance
Attorney General McKenna joins honchos in mortgage fraud huddle
Federal, State Partners Convene to Discuss Ongoing Anti-Fraud Efforts in Housing Markets
FTC Announces New Enforcement Actions In Continuing Crackdown On Mortgage Relief Services Scams
They'll take your last dime and leave you out in the cold.
We're talking about foreclosure rescue scams. Bad guys all across the country are taking advantage of people when they are most vulnerable -- about to lose their home.
State Attorney General Rob McKenna says foreclosure scams are a growing problem.
"The FBI has reported a 63 percent increase in mortgage fraud cases that they are investigating," he said. "And we also know with a lot of pay option adjustable-rate mortgages coming due, that we can expect another round of rescue scams and loan modification scams."
McKenna says his office has also seen an increase in advertisements for loan modification scams "in every manner and description of ad and come-on to people trying to persuade people they need help modifying their loan."
Some scams advertise what is called a payment reduction.
"What they're claiming is that if you pay them, they will help you obtain a lower interest rate, a longer pay return period and so forth," McKenna said. "And they're capitalizing on the fact that there are legitimate loan modification programs out there, including some that our office has helped arrange. So people are confused."
So how do you know which programs are legitimate? The following tips from the Attorney General's Office will help you avoid becoming a victim.
Dos:
Contact your lender yourself
"As many as half of the people in foreclosure problem never contact their lender," McKenna said. And that's a mistake.
Get free advice from a housing counselor
McKenna says you can find plenty of government-certified counselors who offer their advice for free by visiting the state's Web site or by calling 1-877-894-HOME (1-877-894-4663).
Verify a loan modification business is licensed
You can check them out on the Department of Financial Institutions' Web site or by calling 1-877-RING-DFI.
Talk to an attorney
"Spend a few dollars and hire someone who knows what they're doing before you sign anything that commits you to pay thousands of dollars," McKenna said.
And now that you know what to do, let's talk about what not to do.
Homeowners in need of legal help who are unable to afford a lawyer should contact the Home Foreclosure Legal Aid Project. Call 1-877-894-HOME (4663).
Don'ts
Pay upfront fees for help
"That's always a tipoff they're trying to rip you off," McKenna said.
Ignore your lender
You should always work with your lender. Don't believe anyone who tells you otherwise.
Transfer your title
The attorney general says, "Please, please, do not sign over the title to your property against the promise that you're going to get help in the future."
Make your mortgage payments to someone else
You should only be making payments to your lender.
Sign documents without reading them
This is never a good idea.
"Take a few days, several days," McKenna said. "Get someone knowledgeable to read them with you, like a realtor or a lawyer."
For more information:
AGO Foreclosure and Mortgage Assistance
Attorney General McKenna joins honchos in mortgage fraud huddle
Federal, State Partners Convene to Discuss Ongoing Anti-Fraud Efforts in Housing Markets
FTC Announces New Enforcement Actions In Continuing Crackdown On Mortgage Relief Services Scams
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