Foreclosure Fraud, Phony "Rescue Firms"

March 31, 2009 6:04:41 PM PDT
After years of renting, the Mizer family bought a house in 2005 for nearly 88-thousand dollars. Two years later, Kari and her husband Roger saw the rate on their adjustable mortgage shoot up way beyond what they could afford.They looked for refinancing from more than 40 lenders with no success. Then they got a letter from a mortgage restructuring firm that claimed to have a "95-point-5 percent resolution success" rate in stopping foreclosures.

The company charged more than 13-hundred dollars upfront and said it would handle everything. But the Mizers say that's the last they heard. A month later their bank started foreclosure proceedings, telling them it had never been contacted by the company.

Consumer Reports' Andrea Rock says the Mizers were a victim of one of the most common financial traps that are flourishing these days.

Consumer Reports Andrea Rock said, "So-called foreclosure rescue firms comb the public record for pending foreclosures and they prey on people who are desperate to hang on to their home."

To avoid foreclosure traps, Consumer Reports says watch out for unsolicited offers. Be wary of demands for upfront fees before service is provided. And stay away from any service that advises you to stop contact with your lender or that asks you to transfer title of your home.

Consumer Reports says if you're in mortgage trouble, the key is not to delay. As soon as you realize you're running into trouble making your mortgage payment, get help fast ... but legitimate help.

"Get in touch with a government-certified counseling agency that can help you negotiate with your lenders," said Andrea Rock.

As for the Mizers, they've found reason to be grateful.

Consumer Reports says to find a government-certified counseling agency, call the department of housing and urban development at 800-569-4287 or go to its web site at www.hud.gov/foreclosure.

  MORE CONSUMER NEWS | TWEET@ABC30 | FREE ABC30 WIDGET
-----------------------------------------------------------------------------------------------
Sign up for Breaking News Alerts
Breaking News E-Mail Alerts | Text Message Alerts
-----------------------------------------------------------------------------------------------
More News on abc30.com
Local | California/State | National/World | Weather | Entertainment | Business | Politics | Sports | Health Watch | Mr. Food |
-----------------------------------------------------------------------------------------------


Load Comments