Breaking News
More () »

Foreclosure Consultants: What You Need To Know

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

National statistics show 88,000 people had their homes repossessed in January in 2010. That's a31 percent increase from a year ago, and experts believe more than 3 million Americans may faceforeclosure 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 homeownersat risk of losing their homes. Once they have their list of "targets", they contact them, manyposing 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 ofdollars (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'soffice 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 foreclosureconsultants: 

  • I'm here to help: Be wary of any company other than your lender that initiates contact with youabout your mortgage or foreclosure process. Foreclosure notices are public records and scam artistsuse 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 paymentfor these services is illegal.
  • Let's not bother your bank about this:  Walk away quickly from any consultant who tellsyou not to bother to inform your lender, or who says he/she will take on that task for you. Chancesare they're not legitimate and they don't want the bank to know they're "helping" you becausethey'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 inquiringabout past due payments, respond you may be able to work out a new arrangement that will keep youout of foreclosure. Keep making mortgage payments even if you can't pay the full amount unless yourbank tells you otherwise.
  • Check it out: Call your state Attorney General's office to check out any company thatapproaches you or one you want to hire. Dozens of AGs have ongoing investigations into manycompanies and can alert you to problems, and point you toward legitimate help. Check Angie's Listto 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 mortgagecompany is being responsive, look for free counseling. The Homeownership Preservation Foundationoperates the national HOPE Hotline which helps borrowers find non-profit housing counselors who canprovide information on foreclosure. Call 888-995-HOPE, as soon as you realize default isimminent.

Angie's List is the nation's leading provider of consumer reviews on local service companiesthat 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.