Mortgage Relief

 

Foreclosure Rescue Scams

 

Not coincidentally, the subsequent increase in foreclosure rates has led to an increase in rescue scams.  The alleged “rescuers” use various scams with disastrous consequences for already desperate homeowners.  While waiting for the promised relief that never comes, homeowners are not only scammed out of thousands of dollars that they cannot spare, but also fall deeper into default and lose valuable time in saving their homes from foreclosure.

 

Mortgage foreclosure rescue scams generally fall into one of the following three (3) categories:

 

Phantom Help / “Loan Modification Specialists” – Here the supposed rescuer charges very high fees for basic phone calls and paperwork that the homeowner could have done himself.  Or, the rescuer will make promises to represent the homeowner in negotiations with the bank, but will then do nothing to save the home.  Many of these scammers use deceptive tactics to market their “services” as an affiliate government-run loan modification program, even though that is the furthest thing from the truth.

 

Bailout – Here the scammer pays off the default amount in exchange for the homeowner surrendering title to their house.  The homeowner is then told they can rent their house back from the scammer until they are able to pay back what is owed.  Ultimately, under unconscionable rental terms the homeowner defaults, is evicted, and loses all the equity in their home.

 

Bait and Switch – This scam occurs when the homeowner does not realize they are surrendering ownership of their home in exchange for a “rescue.”  Either the sale documents are forged or the homeowner is led to believe that they are only signing documents for a new loan to make the mortgage current.

 

Basically, if it sounds too good to be true, then it usually is too good to be true.  If you have questions about a deal you are entering, talk to a consumer attorney or a housing counselor first!

 

Seeking Assistance If You Are a Victim

 

If you believe you are the victim of a fraudulent foreclosure rescue scam, you should:

 

  • notify your mortgage servicer as soon as possible of what happened and request that they cease any continued efforts to foreclose on your property until you are able to find new representation;

 

  • notify the judge or magistrate overseeing your foreclosure lawsuit of what happened and request a continuance of any further proceedings until you can find new representation or are able to reach a modification or other workout solution with your servicer by yourself;

 

  • contact the company who defrauded you and request a refund of your money; and

 

  • contact a consumer attorney to understand your potential remedies.

Report Foreclosure Rescue Fraud

 

Ohio has laws regulating fraudulent and deceptive companies.  If you have a problem with a foreclosure rescue company, report it to the Ohio Attorney General’s Office here.

 

You can also file a complaint with the Federal Trade Commission.  Although the FTC can’t resolve individual cases of fraud, it can take action against a company if there’s a pattern of possible law violations.  File your complaint at ftc.gov/complaint or call 1-877-FTC-HELP.