Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Avoid foreclosure-prevention scams: 3 tips

By Les Christie, staff writer


NEW YORK (CNNMoney.com) -- With mortgage delinquencies at an all-time high, there are lots of desperate homeowners seeking to avoid foreclosure -- and tons of scam artists trying to take advantage of that.

The fraudsters promise the moon but rarely deliver any help.

In Times Square on Friday, the non-profit community development organization NeighborWorks launched a campaign to heighten awareness of foreclosure prevention scams.

"[For scam artists,] the all time high foreclosure rate is an opportunity in the same way that pushing toxic subprime loans was during the housing boom," said Bernell Grier, CEO of Neighborhood Housing Services of New York (NHS), a NeighborWorks affiliate.

From October through the end of April, community development groups handled more than 10,000 reports of foreclosure-prevention scams, according to Susan Jouard, a spokeswoman for NHS.

Grier said alert consumers can identify fraud from legitimate help if they're aware of these three tell-tale signs.

Avoid anyone who:

Asks for a fee in advance. If you pay them these fees, which can range from $1,000 to as much as $5,000, that's probably the last you'll ever hear from them. Most never even go through the motions of talking to lenders and trying to work out modifications.

Tells you they can guarantee foreclosure will stop. Nobody can do that, especially before they find out more about your individual circumstances.

Urges you to stop paying your mortgage and pay them instead. They're trying to add to the money they already bilked you out of by keeping up the pretense of trying for a modification.

Many community groups, including those affiliated with NeighborWorks, offer expert, free help for homeowners, but they often don't have the funds to advertise their services. It's easier for the scammers to invest in fliers, mailers, even Internet and TV advertising to get their message out.

"Call us if you're having a problem with your property," said Grier. "You shouldn't have to pay for these services." To top of page


Overnight Avg Rate Latest Change Last Week
30 yr fixed3.85%3.87%
15 yr fixed2.96%2.98%
5/1 ARM3.14%3.19%
30 yr refi3.96%4.00%
15 yr refi3.06%3.08%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,607.20 -47.57 -0.29%
Nasdaq 4,813.83 1.12 0.02%
S&P 500 1,983.93 -3.73 -0.19%
Treasuries 2.18 0.01 0.32%
Data as of 2:04pm ET
Company Price Change % Change
Freeport-McMoRan Inc... 10.41 0.22 2.16%
Bank of America Corp... 16.24 -0.20 -1.22%
Apple Inc 112.46 -0.46 -0.41%
Alcoa Inc 9.30 0.45 5.02%
Intel Corp 28.42 0.70 2.53%
Data as of 1:49pm ET

Sections

Efforts to unionize low-wage employees of fast-food franchisees and outside contractors get lift from decision of NLRB. More

Brazil's government announced that its economy fell into recession, shrinking 2.6% from a year ago. More

How do you run a successful crowdfunding campaign? Indiegogo's CEO Slava Rubin offers his top tips and mistakes to avoid. More

Mom and pop investors are dumping their investments and moving to cash at levels not seen since the financial crisis of 2008. More