Beware Phony Foreclosure Aid

“‘Loan modification scams are reaching epidemic proportions across the nation,’ said Thomas J. Curry, a board member of NeighborWorks America, a Washington, D.C., nonprofit spearheading the nationwide program.”

Oh, what program, you ask? The program is actually a campaign, backed by local, state, and federal agencies, targeted at homeowners facing foreclosure, which I know I have written plenty about. The campaign has one key message: Homeowners who are struggling to make payments and are facing foreclosure need to be wary of loan modification schemes. Or as the Globe puts it, “Some people promising help just want to grab your scarce dollars.”

The following are excerpts from the Globe article, Phony Foreclosure Aid is Targeted, by Jenifer B McKim:

“The effort comes as foreclosure activity mounts in Massachusetts. During the first four months of the year, 4,821 homeowners lost their properties to lenders, a 36.6 percent increase from the same time a year ago, according to Warren Group, a Boston company that tracks local real estate. Another 9,008 homeowners went into foreclosure during that time…”

“Barbara Anthony, undersecretary of the state Office of Consumer Affairs and Business Regulation, said officials are working on many fronts to help homeowners, including by hosting workshops to bring lenders and mortgage holders together.”

“’A seemingly quick fix to a foreclosure can be attractive to families in the midst of a crisis, but homeowners need to be aware of the potential to be scammed,’ said Anthony. ‘The quick-and-easy promises of unscrupulous entities offer false hope.’”

“Mortgage loan schemes in Massachusetts typically fall into one of three categories, according to the state attorney general’s office.”

“They include attempts to dupe homeowners into transferring ownership of their properties to someone else; programs that charge hefty fees but provide little or no help; and for-fee bankruptcy filings that are intended to help an owner keep their house, but are rejected by the courts because of improper paperwork.”

And the moral of the story is… DO YOUR RESEARCH! And make sure a counseling agency is approved by the US Department of Housing and Urban Development.

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