LOCAL VOICES: Mortgage scammers still prey on homeowners

By LOU TISLER

Executive Director of Neighborhood Housing Services of Greater Cleveland

As if homeowners struggling to make their mortgage don't have enough to worry about, June's National Homeownership Month comes with a serious warning that could mean the difference of thousands of dollars and even jeopardize your home.

Be careful about who you turn to for foreclosure prevention assistance.

The foreclosure crisis has created a breeding ground for mortgage rescue scammers posing as "help," claiming they can modify your mortgage -- guaranteed.

The catch? It will cost you $1,500 or more. The company produces no results to help you and, what's worse is it often disappears as fast as your money does.

When a foreclosure prevention company approaches you there are three major red flags you should look for to avoid getting scammed:

-- If a company approaches you before you contact them, it could be a scam.

-- If the company guarantees a loan modification, it's a scam.

-- If the company charges a fee for foreclosure help, it's a scam.

Mortgage rescue scammers prey on minorities, elderly any homeowners struggling to pay their mortgage. Scams ranging from fake government programs to the "bait-and-switch," luring homeowners to sign over the rights to their home to scammers are leaving homeowners worse off than they were from the threat of an impending foreclosure. Scammers will approach homeowners by posing as housing counselors, speaking their native language, even joining their faith-based organizations to prey on homeowners when their guard is down.

Sandusky homeowners should never pay for foreclosure prevention help because it's available for free from HUD-approved housing counselors at organizations such as Neighborhood Housing Services of Greater Cleveland. Counselors are often the first line of defense for homeowners facing foreclosure, triaging them to determine whether the family needs help to fill short-term or long-term income gaps, aid to repair property damage, or assistance in budgeting and money management NHSGC, a member of the NeighborWorks network of organizations that provide homeownership education and counseling, can deploy a range of services to help northeast Ohio-area residents in danger, including face-to-face counseling, bridge loans to help borrowers falling behind in payments catch up, rehab loans for repairs and maintenance, and public education.

NHSGC has joined forces with affordable housing non-profits across Ohio to educate Ohio homeowners about common mortgage rescue scams to watch out for, give tips on how to avoid scams, how to report a scammer to the Attorney General's office and where Ohio homeowners can access trusted mortgage modification help from a HUD-certified housing counselor. The initiative is sponsored by the NeighborWorks Collaborative of Ohio, created to reach more families in need across Ohio. The Collaborative is the only statewide foreclosure rescue fund in the nation.

The need for NeighborWorks organizations such as NHSGC has never been greater as struggling homeowners try to navigate this fragile housing landscape. We continue to receive calls from homeowners who paid thousands of dollars because they were promised a loan modification. When the homeowners are notified their home is being sold or foreclosed on it comes as a complete shock.

Sadly, in many cases the homeowner is robbed of hard-earned money that could and should have gone toward their mortgage.

The only foreclosure help homeowners can rely on is from a HUD-approved housing counselor. You can never be too careful when it comes to your home.

Where to call

Homeowners in Cuyahoga, Erie, Huron, Lorain and Medina counties can find anti-scam tips and information that could save you thousands of dollars and even your home at LoanScamAlert.org or by calling NHSGC at 216-458-4663.

Six signs of a possible scam

-- A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage. They may pocket your money and do little or nothing to help you save your home from foreclosure.

-- A company/person guarantees they can stop a foreclosure or get your loan modified. Nobody can make this guarantee to stop foreclosure or modify your loan.

-- A company/person advises you to stop paying your mortgage company and pay them instead. Never send a mortgage payment to anyone other than your mortgage lender.

-- A company pressures you to sign over the deed to your home or sign any paperwork that you haven't had a chance to read, and you don't fully understand.

-- A company claims to offer "government-approved" or "official government" loan modifications. Remember, you do not have to pay to benefit from government-backed loan modification programs.

-- A company/person you don't know asks you to release personal financial information online or over the phone.