According to industry studies, as many as 8 million American homeowners are expected to face foreclosure through 2012. Making matters worse is that scam artists see this crisis as a prime opportunity to make money off of people in danger of losing their homes.
These so-called mortgage “rescue” companies use simple messages in print, broadcast and online ads to hook in homeowners facing foreclosure or other financial difficulty. Or they may contact homeowners directly, offering help for a fee.
Scammers may imply they are associated with NeighborWorks, the U.S. Department of Housing and Urban Development (HUD), the Federal Housing Administration (FHA), HOPE NOW and other reputable organizations to gain a homeowner’s trust, personal information and money.
NeighborWorks America urges homeowners who need help to beware of foreclosure rescue scams and offers the following tips to avoid them:
- 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 the Web site at 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 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 at www.ftccomplaintassistant.gov or call 1-877-FTC-HELP (1-877-382-4357).
For more information, contact Robinson, Waters and O’Dorisio.