Consumer Alert: Don’t Let Foreclosure Rescue Schemes Sink You
Fees and Practices Trigger Complaints to FBI and State Investigators
|FBI Salt Lake City November 04, 2009|
In tough financial times it seems plenty of companies are claiming they can save Utah homeowners from foreclosure. There are a growing number of advertisements offering home loan modifications–or foreclosure rescue plans–for up-front fees. In Salt Lake City, FBI special agents who specialize in mortgage fraud investigations are teaming up with investigators at the Utah Department of Commerce to issue the following warnings:
- The FBI and the Utah Department of Commerce are receiving complaints from homeowners alleging they paid up-front fees for home loan modifications, but companies are not delivering on promises.
- Be cautious of a company’s pitch for fees; many lenders offer free help for homeowners seeking home loan modifications.
What is home loan modification?
Home loan modification programs can be a way for homeowners who face foreclosure to keep their homes. When done properly, a homeowner who qualifies may be able to lower his or her monthly payments. Many lenders offer this service for free, and there are a number of HUD-approved counselors who can answer homeowners’ questions about the process.
FBI and State Investigators warn about practices
FBI mortgage fraud investigators and state investigators have noted a steady number of complaints about various companies that claim to offer home loan modifications. Homeowners say they’ve paid as much as $2,000 in fees, filled out paperwork, and thought the companies would modify their loans. But consumers report that some companies aren’t following through with the process, while other companies claim the homeowner didn’t qualify for a loan modification. Unfortunately, by the time consumers figure out they’ve been scammed they’ve lost the fees and are closer to losing their homes. Such cases are a growing concern to FBI Special Agent in Charge Timothy J. Fuhrman and Executive Director of the Utah Department of Commerce, Francine Giani. “Foreclosure rescue scams are possibly the most egregious of all consumer scams,” said Giani. “Here homeowners lose twice. They lose their home and their money to fraudsters who prey on their desperate situation with nothing to offer but empty promises.” “We want to warn homeowners before it’s too late,” said Fuhrman. “Usually, by the time someone reports a problem, they’ve been victimized. We want consumers to know how to spot a scheme and where they can get the legitimate help they need if times get tough.”
Where consumers can file complaints
FBI Salt Lake City Field Office: (801) 579-1400 or fbi.gov/saltlakecity.
The Utah Division of Real Estate: As part of the Utah Department of Commerce, the Division of Real Estate provides public protection through education and licensure of real estate brokers, sales agents, appraisers, and regulation of residential mortgage lenders.
More tips for homeowners
With the help of the Utah Department of Commerce, the United States Department of Housing and Urban Development, and other partners, the FBI Salt Lake City Field Office has compiled a list of resources to help homeowners. This information is also posted on the FBI Salt Lake City Division’s new website at fbi.gov/saltlakecity.
Making Home Affordable.Gov: The website at http://www.makinghomeaffordable.gov/ offers homeowners advice on avoiding foreclosure rescue scams, plus a list of FAQ’s, a payment reduction calculator, and other useful tools.
Housing and Urban Development (HUD): The link at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=UT will connect homeowners to a variety of organizations throughout Utah that offer advice through HUD-approved counselors.
HUD issued the following news release in the spring of 2009: The news release at http://www.hud.gov/news/release.cfm?content=pr09-033.cfm offers more details on foreclosure rescue schemes.
Federal Trade Commission: The FTC offers more tips on how to avoid foreclosure rescue schemes at http://www.ftc.gov/bcp/edu/microsites/moneymatters/your-home-foreclosure-rescue-scams.shtml.