How not to be a victim of foreclosure fraud
As the number of struggling homeowners facing foreclosure continues to rise, so do the number of unscrupulous individuals and firms will to prey on them.
“A mortgage lender or a financial counselor can assist you in finding real options to avoid foreclosure,” said Sissy Osteen, an Oklahoma State University Cooperative Extension resource management specialist. “If someone is offering to consult with your lender and offers to arrange to stop or delay foreclosure for a fee be sure to check his or her credentials, reputation and experience. It’s important to protect yourself and not be a victim of a foreclosure scam.”
Resources for checking out a foreclosure prevention and counseling agencies include the U.S. Department of Housing and Urban Development (HUD), the National Association of Foreclosure Prevention Professionals (NAFPP) and the local Better Business Bureau (BBB). The Federal Deposit Insurance Corporation (FDIC) also recommends NeighborWorks America, the Fannie Mae Counselor Search, the National Foundation for Credit Counseling (NFCC), and the Homeownership Preservation Foundation among others.
“Homeowners facing foreclosure need to be aware that foreclosure rescue scam artists are out there in full force and see this as a prime opportunity to make money,” said Ken Wade, CEO of NeighborWorks America in February 2009. “If you are facing foreclosure, contact a HUD-approved nonprofit housing counseling agency to receive foreclosure counseling. Nonprofit organizations do not ask for a fee to help you avoid foreclosure. Be wary of any rescue company that attempts to charge you for help.”
Osteen agrees and offers the following tips to help homeowners avoid foreclosure prevention fraud:
- Be sure the counseling organization is on the Department of Housing and Urban Development’s (HUD) list of approved agencies.
- Do not work with a counselor or agency that collects a fee prior to providing any service or that accepts payment only by wire transfer or cashier’s check.
- Read all paperwork thoroughly and understand what it says in detail before signing.
- Remember – if an offer seems to be too god to be true, it probably is.
NeighborWorks America also reminds individuals never to release financial information online or over the phone to companies or individuals you know nothing about.
The National Association of Foreclosure Prevention Professionals (NAFPP) includes contact information for 47 individuals and organizations across the nation. The NAFPP website at www.nafpp.org includes a list of 49 must-ask questions to help consumers avoid foreclosure prevention fraud and scams. The site also includes instructions for filing complaints against NAFPP members or their representatives and requesting mediation.
Those preferring to learn about their options without actually meeting with a counselor can order “Avoiding Foreclosure,” a free DVD for consumers, from the NFCC.
Osteen offers one last piece of advice to those seeking to prevent foreclosure.
“If a person offers you a guarantee, be cautious,” she said. “Reputable counselors won’t guarantee to stop the foreclosure process, no matter the circumstances. This usually involves legal action outside the abilities of a counselor. Working with a legitimate counselor can definitely increase your chances of keeping your home, just be careful of those promises. Be sure to get everything in writing.”