R.I. officials say foreclosure rescue scams on the rise
3:52 PM Mon, Jun 22, 2009 | Permalink
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PROVIDENCE, RI -- In the world of consumer fraud, there's a new face in town: foreclosure rescue counselors, say state and federal officials. They prey on homeowners struggling with mortgage debt and lure them with empty promises of salvation from foreclosure's grip, for a fee, of course, warn the housing officials. Rhode Island Housing officials say they've seen many versions of the foreclosure rescue scam recently. Some trick homeowners into signing over the deeds on their property; others float phony mortgage modification programs. Most charge a hefty price for counseling services that are normally free. The number of people falling victim is increasing at an alarming rate in Rhode Island and nationwide, said Richard Godfrey, executive director of Rhode Island Housing. He said since November 2007, about 4,500 homeowners, facing foreclosure, have come to the housing agency seeking assistance. "Rhode Island ranks number ten in foreclosures in the country. It led the nation in sub-prime mortgages. Now we are facing a new challenge," Godfrey said. "We know that people are being bombarded everyday, with radio advertisements, TV advertisements [and] solicitations at home. I'm sure there are some fee-based companies or individuals which offer legit services. The problem is...there is no way to identify those who are offering legit services for a fee and those who are making promises they can't keep. "The only way to know that you are getting real independent services is to go to a free agency recognized by HUD [U.S. Department of Housing and Urban Development]." At a news conference Monday at Rhode Island Housing on Washington Street, U.S. Rep. James Langevin, Providence Mayor David N. Cicilline, representatives from HUD and others stressed the importance of learning how to recognize these scams, where to go for help if you're in a foreclosure, or if you've been taken by a predatory counselor.
Greer offered several telltale signs [see list below] of a foreclosure rescue scam. "It is critically important for consumers to arm themselves with the information they need to guard against unscrupulous con artists." Langevin urged people to be wary and seek the appropriate agencies for help. "Tough times have brought out both the best and worst in people," Langevin said. "If you are one of those people who find themselves in a difficult situation...are greeted by a phone call...offered something that is too good to be true, it probably is. Don't get caught up in these types of scams, or these frauds." Godfrey said the success rate of those who have sought Rhode Island Housing for foreclosure assistance has been fairly good, roughly 50 percent, but it takes time and consumers have to be willing to stick with the counseling. Signs to watch for in foreclosure rescue scams.
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