Tips for Consumers: Mortgage Foreclosure Scams on the Rise
Tips for Consumers
Mortgage Foreclosure Scams on the Rise,
Baltimore, MD- August 30, 2007 -Across the U.S., homeowners facing mortgage foreclosure are being scammed by foreclosure "rescue" companies promising to save their house but only take their money. In light of this emerging trend, the Better Business Bureau of Greater Maryland (BBB) warns gloomy forecasts for the housing and financial markets means increasingly more people could fall prey to mortgage foreclosure scams in the coming months and years.
"According to estimates, as many as 1.7 million homeowners could lose their house to foreclosure in the next couple years," said Angie Barnett, president and CEO for the Better Business Bureau of Greater Maryland. "These people will be in the desperate position of trying to save their home and they'll look for someone to trust. Unfortunately, con artists are seeing their chance to step in and make a fast buck off of troubled homeowners."
In recent months, the BBB has heard from victims of foreclosure rescue schemes in almost all 50 states. Not surprisingly, states with the highest foreclosure rates-such as Georgia, Colorado and Ohio-have an exceptionally high number of complaints for companies offering foreclosure rescue.
BBBs nationwide have received hundreds of complaints from homeowners who enlisted the help of unscrupulous mortgage foreclosure rescue companies and they all tell a similar story.
Typically, homeowners report they were either contacted directly by a mortgage foreclosure rescue company or came across a Web site while searching for help to stop foreclosure on their home. The companies claimed they would renegotiate the terms of their mortgages and stop foreclosure actions, or the homeowners would get their money back. Victims, who were desperate to keep their homes, paid as much as $1,300. In the end, the companies did very little work or often nothing at all. Most victims, not only lost their homes, but they also have not been able to get the promised refunds.
In the last three years, the Clearwater, FL BBB received 508 complaints for foreclosure services headquartered in their area. Of those complaints, 322 came within the last 12 months. The total amount of refunds requested by the complainants in the Clearwater area amounts to more than $600,000.
The Charlotte BBB reports that last year only two mortgage foreclosure rescue companies operated in the Charlotte area, but now the number has now jumped to 15-six of which have government actions against them including cease and desist requests, temporary restraining orders or consent judgments.
The Cleveland BBB reports a similar dramatic increase-21 new companies offering mortgage foreclosure rescue opened in the Cleveland area in the past year alone.
"BBBs across the nation are hearing the same story from victims over and over again," added Barnett. "Desperate homeowners are duped into a false sense of security by crooked companies and think their prayers have been answered and their homes will be saved. Unfortunately, many people are losing a lot of money and their houses through untrustworthy foreclosure rescue operations."
The BBB offers the following advice for homeowners facing mortgage foreclosure:
* Contact your BBB at www.bbb.org to request a free Reliability Report before paying any "rescue" company. You can also check with the Maryland Attorney General at www.oag.state.md.us or 410-576-6300 to obtain a list of foreclosure counseling organizations and the Maryland Real Estate Commission at www.dllr.state.md.us or 410-230-6200.
* Call 1-877-HOA-P555 for information on the Home Owners Preserving Equity (HOPE) Initiative launched by Governor O'Malley. The Department of Housing and Community Development (DHCD) will implement two strategies that include: $111 million in financial assistance to leverage significant capital in order to effectively attack the defaulting subprime and "exotic" mortgages crisis with financing, incentives, education and other support and the Maryland Homeownership Task Force will assess the scope of the potential foreclosure problem in Maryland to prevent foreclosure and preserve homeownership.
* Do not delay dealing with foreclosure because your options may become more limited as time passes.
* Talk to your lender. The first thing you should do is talk to your mortgage company about how to restructure your loan payment or refinance.
* Never sign a contract under pressure and never sign away ownership of your property. Ask a trusted family member, your attorney or a financial professional to review any paperwork you may be asked to sign.
To file a complaint visit: www.baltimore.bbb.org or write: BBB, 1414 Key Highway, #100, Baltimore MD 21230. Their office serves Baltimore and all of Greater Maryland.