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Swindlers in the Midst of Foreclosure Listings

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By : John Cutts    99 or more times read
The continuous addition of homes to foreclosure listings across the country has sparked the creativity of several people and companies out to swindle homeowners in one of the most vulnerable periods in their lives.

One of these companies allegedly scamming money from troubled homeowners is the American Modification Agency. In December last year, a class-action lawsuit was filed against the firm, claiming the company defrauded over 7,000 borrowers around the country. Among these borrowers are Francis and Blossom Joseph of New York City. The Josephs said they came to know of American Modification when they saw an ad on TV promising help for homeowners worrying about foreclosure listings.

Despite paying $3,190 to American Modification, the Josephs still were declared in default and their home added to foreclosure listings. A spokeswoman for New York Attorney General Andrew Cuomo said Cuomo’s office is currently reviewing cases against fraudulent foreclosure assistance providers.

Meanwhile, Andrew Daniels, chief financial officer of American Modification, insisted the class-action lawsuit has no basis and said he will defend the firm’s reputation and strong record in preventing homes from being added to foreclosure listings.

After modification companies made many homeowners wary, the scammers called themselves foreclosure consultants to borrow from the better image of housing consultants working for federal agencies.

They distribute leaflets and post flyers showing foreclosure listings to sow more fear into homeowners. They air late-night TV commercials and send letters that seem to come from federal housing agencies. The letters contain words informing homeowners they have been pre-qualified for loan modification programs run by government agencies.

Michael Hickey, head of the Center for New York City Neighborhoods, said he does not feel good about foreclosure consultants charging high fees. They fleece money from vulnerable people and then leave them with the advice to simply ignore the lenders.

Hickey said the Center for NYC Neighborhoods offer foreclosure counseling for free to anyone on the 311 hotline. Since July 2008, the center has already helped over 1,000 borrowers keep their homes from being added to foreclosure listings. Many of these borrowers, Hickey said, paid foreclosure consultants who did nothing.

Two other companies promising foreclosure help after fees are paid are Florida-based Home Assure and Colorado-based Infinity Group. Home Assure was sued by Minnesota Attorney General Lori Swanson after several Minnesota residents like Terry Lake filed complaints against Home Assure. Meanwhile, Infinity President Neil Singer denied his company did something wrong, but agreed to return the money of complainants Johnny and Beatrice Watson.

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