Avoiding mortgage relief scams
The offers seem like answers to the prayers of a struggling homeowner: A promise of legal tactics to forestall foreclosure, reduce mortgage balances and interest rates, or restore credit. But these so-called mass joinder lawsuits being advertising in mailings are fraudulent – sent out by companies purporting to be law firms, according to a consumer alert by the Federal Trade Commission’s (F.T.C.) website.
- Consumers can lose valuable time to these dishonest players – not to mention money. The nonprofit Lawyers Committee for Civil Rights Under Law estimates that homeowners nationwide who reported scams to its database have lost more than $60 million in the last two years alone.
- There are many credible law firms around to help homeowners. But some businesses might be promoting themselves as providers of legal services, they might have only one lawyer on retainer, as a way around F.T.C. rules that allow only lawyers to collect upfront fees on mortgage aid.
- Such firms, and people posting as lawyers, are fueling a 60 percent jump in complaints about mortgage scams this year, according to a report by the homeownership Preservation Foundation, which helps distressed homeowners.
- When speaking with a lawyer, consumers might ask about the lawyer’s track record, including documentation of successes via media reports or signed court documents awarding borrowers money or relief.
- Consumers should beware of promises. According to the Homeownership Preservation Foundation, “legitimate lawyers don’t make guarantees, just like doctors don’t.”
- There are plenty of free services available at nonprofit groups certified by the Dept. of Housing and Urban Development.
- The CALIFORNIA ASSOCIATION OF REALTORS® also has information available about short-sale and foreclosure-prevention fraud. Visit http://www.car.org/aboutus/forconsumers/loanfraud/for more information.
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