Foreclosure Rescue

You know, I just have to say this. From the BBB chair I sit in every day (okay, most days – not every day literally), this recession, well, it really stinks.  As the average Jane and her family scrutinizes every penny spent and genuinely grapples with monthly priorities that once were taken for granted such as mortgage, food, insurance and medical care,  swindlers are out there profiting off these unfortunate and uncertain times.  Today’s Two Cent$ is about the mortgage rescue and loan modification industry. 

Thankfully, many Marylanders are more consumer savvy and are making inquiries with BBB before they fall for the bait of those very appealing and come on, simply “too good to be true” home mailers boasting eligibility for a “payment reduction program” on their home loan.  We’ve received copies of advertisements from loan modification businesses that at first glance, you would have thought the form was a W-2 (very government-looking), to others that have what appears to be very official government seals embossed on the letters talking about very official sounding federal programs.  And then, there’s my favorite. 

A single mom receives a simple copy of her home deed (which is public information) with a note on white paper attached that simply says, “call me” with a phone number and first name.  All these gimmicks to get us to use home rescue service simply causes consumers to have decreased trust in the mortgage industry (18% decrease in our trust level according to Gallop poll released 2008) and makes it very challenging for the good guys to come out on top.   

On April 6^th, the Department of Justice notified the public that the feds and state governments are clamping down on mortgage loan modification fraud and foreclosure rescue scams. The FTC identified approximately 71 distinct companies running suspicious ads for mortgage foreclosure rescue operations. One company spent $9 million dollars on TV and radio ads in less than one year. Metro Dream Homes marketed their mortgage fraud Ponzi scheme through live presentations as posh hotels in DC, Baltimore and Beverly Hills, ultimately bilking $70 million from thousands of mortgage investors. 

So, what are the key warning signs or “red flags” that may indicate a scam? Beware if the solicitor:

1. requires upfront fees before any services are provided!
2. tells you to make your home mortgage payments to anyone other than your lender, asks you to transfer your property deed or title, advises you to stop communications with your lender, or tells you to file bankruptcy to keep your home!
3. uses the words “I guarantee” and “trust me” in the same sentence, paragraph or even the same day!

Where to go for help? 
If you have believe you uncover a scam or have been a victim of foreclosure rescue or loan modification programs/services, have all the information about the company (names, address, phone), copies of any documents you have received from the company, and report it to:
BBB: www.bbb.org
FTC:  www.ftc.gov
MD Attorney General:  www.oag.state.md.us

If you are in jeopardy of losing your home for foreclosure, contact the following for assistance:

• Maryland’s HOPE Initiative:  www.mdhope.org or 1-877-462-7555
• For a list of organizations offering foreclosure counseling visit www.oag.state.md.us/consumer/foreclose.htm or call 410-528-8662

Whatever you do, don’t stick your head in the sand – keep communications open with your lender and get help now!  Hope this helps you! Talk later - Angie