Foreclosure Consultants: What You Need To Know

Published:
Updated:

National statistics show 88,000 people had their homes repossessed in January in 2010. That's a 31 percent increase from a year ago, and experts believe more than 3 million Americans may face foreclosure in the coming months.

According to RealtyTrac, there are over 12,500 foreclosure properties in the state of Ohio. Over1,700 of those properties are located in Franklin County.

Just like shady contractors follow storms, preying on those in need of quick home repairs, predators are now seeking homeowners reeling from foreclosure notices.

These so-called "foreclosure consultants" are, through public documents, seeking out homeowners at risk of losing their homes. Once they have their list of "targets", they contact them, many posing as government workers, promising to help save their house with a loan modification.  The catch: big bucks up front.

Time and time again, desperate homeowners fall for the ploy and find themselves out thousands of dollars (which could have been used to make a mortgage payment) and still facing foreclosure.

If you have been victimized or you've had a narrow escape, call your state Attorney General's office to report it and submit a consumer review to Angie's List to help warn others.

Angie's List warning signs that you're being approached by predatory foreclosure consultants: 

  • I'm here to help: Be wary of any company other than your lender that initiates contact with you about your mortgage or foreclosure process. Foreclosure notices are public records and scam artists use them to target homeowners in distress.
  • For a small fee: You don't need to pay for "loan modification" or "foreclosure assistance" services. Walk away from any company that asks for payment upfront in many states upfront payment for these services is illegal.
  • Let's not bother your bank about this:  Walk away quickly from any consultant who tells you not to bother to inform your lender, or who says he/she will take on that task for you. Chances are they're not legitimate and they don't want the bank to know they're "helping" you because they're preparing to take your money and run. 

How to get help after you've received your foreclosure notice:

  • Work first with your bank/lender: When you get a call or a letter from your bank inquiring about past due payments, respond you may be able to work out a new arrangement that will keep you out of foreclosure. Keep making mortgage payments even if you can't pay the full amount unless your bank tells you otherwise.
  • Check it out: Call your state Attorney General's office to check out any company that approaches you or one you want to hire. Dozens of AGs have ongoing investigations into many companies and can alert you to problems, and point you toward legitimate help. Check Angie's List to see if there are member reports about any local mortgage or consulting companies.
  • Find legitimate help: Start with your mortgage company. If you don't think your mortgage company is being responsive, look for free counseling. The Homeownership Preservation Foundation operates the national HOPE Hotline which helps borrowers find non-profit housing counselors who can provide information on foreclosure. Call 888-995-HOPE, as soon as you realize default is imminent.

Angie's List is the nation's leading provider of consumer reviews on local service companies that helps homeowner's nationwide find reliable help in more than 500 categories of service.
For more information, (direct to stations web) and look for the link to Angie's List.