Avoiding Foreclosure Scams

With the foreclosure rate escalating across the state, scam artists are trying to take advantage of Michigan homeowners who may be at their most desperate time. Our office receives about 15 complaints a week regarding a couple of different foreclosure rescue scams.

One type of scam begins with a scam artist making an unsolicited offer to pay a homeowner’s past due mortgage payments and “rescue” them from foreclosure. The scam artist will have the homeowner sign over the deed to the house and promise that they can stay in their house as a renter with the opportunity to buy back their home when their finances improve.

Scam artists will then obtain a new mortgage on the house at a higher value than the old loan and keep the difference between the new loan and the old loan. The scam artist has now stolen the homeowner’s equity in the property. Scammers will often walk away from the situation, stop paying the new mortgage and pocket all of the equity. The home will again go into foreclosure and the former homeowner, who is now the renter, will be forced to leave the property and has now permanently lost their house.

A newer scam that our office has started to see involves a scammer again making an unsolicited offer to a homeowner facing possible foreclosure. The scammer tells the homeowner they are from a company that can deal directly with their mortgage servicer. The scam artist tells the homeowner that if they send them some money, many times over $1,000, they can prevent a foreclosure. But the scam artist never contacts the mortgage servicer and will then try to bilk the homeowner out of more money. In many instances the so called company never even existed.

If Michigan homeowners believe they may have uncovered a foreclosure rescue scam, please contact OFIR toll-free at (877) 999-6442 or online at www.michigan.gov/OFIR

Do not discuss your mortgage loan situation with anyone advertising that they can rescue you from foreclosure.  These are almost always a scam. At best you will only delay the foreclosure and eviction by a few months and at worst, you could lose any equity you have in your property.

If a homeowner is facing a possible foreclosure and would like professional advice on their situation they can contact one of the U.S. Department of Housing and Urban Development’s (HUD) approved housing counselors. For a list of HUD approved housing counselors in Michigan visit:

www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=MI

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre42.shtm