The Homeownership Preservation Foundation (HPF), an independent national nonprofit dedicated to helping distressed homeowners navigate financial challenges and avoid mortgage foreclosure through its Homeowner’s HOPE tm Hotline at 888-995-HOPE tm, reported that mortgage foreclosure scams have surged nearly 60 percent this year in the wake of newly launched federal programs.
In addition to its free counseling to help avoid foreclosure, HPF also operates a national hotline for troubled homeowners to report instances where they believe they have been defrauded. While not all reported instances are necessarily fraud, HPF refers the information to a national database accessed by appropriate regulators and law enforcement agencies. About half of the reported scams involve attorneys or individuals claiming to offer specialized “legal services.”
“Regretfully, every new government initiative spawns a slew of foreclosure avoidance scams, often from the same cast of characters doing business under various names to avoid easy detection and identification,” warned Colleen Hernandez, CEO of HPF. “Most of these scams involve individuals supposedly offering mortgage foreclosure avoidance assistance that trained HPF counselors provide at no cost. Sadly, with most scams, no meaningful services are ever provided.”
Ms. Hernandez said distressed homeowners should avoid any company or individual demanding upfront payments for assistance in avoiding foreclosure on their homes.
“HPF’s trained counselors can provide distressed homeowners with all the assistance they need to understand their options, prepare the necessary paperwork, and negotiate with their mortgage servicers,” Ms. Hernandez said. “Anyone facing foreclosure should never pay upfront fees for these services.”
Ms. Hernandez also warned that some scam organizations are making unauthorized use of HPF’s logo and brand in their promotional materials, creating the impression that they are affiliated with the organization.
“The only way distressed homeowners can be certain they are dealing with a trained HPF counselor is by calling 888-995-HOPE.”
The various government programs that have been launched or revised this year and that are likely responsible for this increase in calls reporting scams include the National Mortgage Settlement, expanded HAMP and HARP, and OCC Independent Foreclosure Review.
To learn about the six main warning signs of loan scams, visit HPF’s “Avoid Mortgage Scams” web page or call 888-995-HOPE.