As the number of distressed homeowners who want to save their properties from bank and government foreclosures continues to grow, so are companies that took advantage of the desperation of homeowners.
It has been reported that for-profit companies are starting to sprout all over the country to take advantage of unsuspecting homeowners who are desperate enough to believe in anything if it would mean saving their properties from government and bank foreclosures.
These fraudulent companies offer their so-called services to distressed homeowners to help them avail of the federal government’s refinancing and loan modification programs.
One example is the California-based Federalhomeloanrelief.com which has a web site featuring a seal identical to that of the U.S. Housing and Urban Development (HUD). The problem is the company is not affiliated and has never been affiliated with the HUD.
It uses its web site to entice distressed homeowners who would be required to pay upfront fees. The HUD has ordered the company to take down its web site bearing a seal similar to that of the agency.
Jerry Brown of HUD explained that the company is not and has not been approved as counseling firm of the agency. The company is known to be aggressive in its business operation in California because of the state’s high foreclosure rate.
California foreclosures included 21.7 riskiest loans in December 2007. With the expected loan resets due in 2009 and 2010 on Alt-A and option adjustable rate mortgage, more bank and government foreclosures activities are expected in the state.
Most scammers target senior citizens who are on the brink of losing their properties to bank and government foreclosures. Some of these scammers tried to convince unsuspecting homeowners that only by coordinating with lawyers would they avail of loan modification or refinancing.
According to Brown, Internet scams are proliferating because distressed homeowners are seeking mortgage assistance.
On a related note, the U.S. Federal Trade Commission has asked a New Jersey district court to ban two companies that falsely claim that they were affiliates of Hope Now Alliance, a government-supported mortgage assistance network.
The HUD offers free assistance to homeowners on how to save their properties from bank and government foreclosures. The HUD has a list of agency-certified counselors and also provides information to troubled homeowners on its web site.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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