Mortgage Foreclosure Scams on the Rise
The following article is adapted with permission of the Better Business Bureau.
Foreclosure “rescue” companies may promise to save your home, but only empty your wallet.
Across the U.S., homeowners facing mortgage foreclosure are being scammed by foreclosure “rescue” companies promising to save their house but that only take their money.
The Better Business Bureau (BBB) warns that gloomy forecasts for the housing and financial markets means that 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 David Weiss, BBB president. “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 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.
Typically, homeowners report that 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 promised refunds.
The Greater Cleveland Better Business Bureau has seen the number of foreclosure rescue companies increase almost as rapidly as the number of foreclosures. In the past year alone, 21 new companies have come to the BBB’s attention.
A Cleveland woman received a phone call from Financial Protection Industries (FPI) after her home went into foreclosure. She paid $950 to save her home only to realize later that the company did nothing at all. Her home was sold at a sheriff’s auction.
“BBBs across the nation are hearing the same story from victims over and over again.” added Weiss. “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 or go to www.bbb.org to request a free Reliability Report before paying any “rescue” company.
- Beware of the personal approach. Some less-than-ethical businesses will stuff a handwritten note in your front door or mailbox that implies that “help” is available from someone who has your best interests in mind.
- 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.
Cuyahoga County residents facing foreclosure can get free advice and assistance through the County’s Foreclosure Prevention Program by calling 211 or 216-436-2000.
If you feel you have been taken advantage of by an unethical mortgage foreclosure “rescue” company, file a complaint with your BBB at www.bbb.org.
For more trustworthy advice and tips for troubled homeowners, go to www.bbb.org.
BBB is an unbiased organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB membership contractually agree and adhere to the organization’s high standards of ethical business behavior. BBB provides:
- Objective advice
- Free business Reliability Reports and charity Wise Giving Reports
- Educational information on topics affecting marketplace trust.
- To further promote trust, BBB also offers complaint and dispute resolution support for consumers and businesses when there is difference in viewpoints.
The first BBB was founded in 1912. Today, 128 BBBs serve communities across the U.S. and Canada, evaluating and monitoring more than 3 million local and national businesses and charities.
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