February 25, 2009

Rescue Offers: Helpful Plans or Foreclosure Scams?

Homeowners in need should call lender or non-profit counselor

By Marcie Geffner, Cyberhomes Contributor

Homeowners who are facing foreclosure tend to be stressed out, short of cash and anxious about their future. Unfortunately, those characteristics can make them attractive targets for financial predators. That’s why these homeowners must be especially alert to avoid foreclosure scams and rely only on reputable organizations to help them.

One common foreclosure rescue scam is “phantom help,” in which a “rescuer” charges the homeowner outrageous fees to make telephone calls and complete paperwork the homeowner could have completed himself or promises “more robust representation that never materializes,” according to “Dreams Foreclosed: The Rampant Theft of Americans homes Through Equity-Stripping Foreclosure Rescue Scams,” a report by the National Consumer Law Center in Boston.

This type of scam “gives homeowners a false sense of hope, delays them from seeking qualified help and exposes their personal financial information to a fraudster,” according to the Federal Deposit Insurance Corporation, the agency that insures bank deposits.

While not all foreclosure rescue services are scams, many of these outfits are less competent and clearly more costly than legitimate nonprofit counseling agencies, explains Bruce Hahn, president of the American Homeowners Foundation, a consumer education organization in Arlington, Va.

Read on: http://www.cyberhomes.com/content/news/09-02-02/Rescue_offers_Are_they_helpful_plans_or_foreclosure_scams