Rhode Islanders Falling Prey to Mortgage Modification and Foreclosure Rescue Scams
Providence, RI – June 22, 2009 – (RealEstateRama) – Scams that promise to “rescue” troubled homeowners from foreclosure are popping up at an alarming rate nationwide. Here in Rhode Island, which is currently ranked 10th in the nation for foreclosure activity, distressed homeowners are at particularly high risk of predators.
Joined by U.S. Congressman Jim Langevin, State Senator Juan M. Pichardo, Providence Mayor David Cicilline, and representatives of the Rhode Island Attorney General’s Office, U.S. Department of Housing and Development (HUD), R.I. Department of Business Regulation, Housing Action Coalition of Rhode Island, The Housing Network of Rhode Island, Rhode Island Legal Services, Money Management International, Urban League of Rhode Island and the NAACP Providence Branch, Rhode Island Housing today cautioned Rhode Islanders about this fraudulent activity, and provided helpful information on how to recognize scams and how to avoid them.
“It’s very unfortunate that so many people are already in trouble based upon the predatory and sub-prime loans of the past few years and now there are new predators that are targeting those same people,” stated Richard Godfrey, Executive Director of Rhode Island Housing. “Predators know that people who fear losing their homes are vulnerable and may be desperate. It is important for homeowners to know who to trust for help and how to protect themselves from those who are looking to take advantage.”
According to warnings issued by HUD and the U.S. Treasury Department’s Office of the Comptroller, consumers should always proceed with caution when dealing with anyone offering to help modify their mortgage or avoid foreclosure.
The warning advises consumers to contact a legitimate housing or financial counselor for help. For a list of HUD-approved counseling agencies, consumers should visit www.rhodeislandhousing.org and select “Get out of housing trouble.”
“Scammers are increasingly targeting struggling homeowners with false promises and steep fees to provide foreclosure assistance,” said Nancy Smith Greer, HUD’s Providence Field Office Director. “A homeowner NEVER has to pay fees to participate in programs offered by HUD-certified housing counselors, like the Rhode Island Housing HelpCenter. We cannot stress enough the value of the services offered by Rhode Island Housing and our other housing counseling agencies throughout the state.” [Rhode Island Housing] [June 22, 2009] Page 2
“Unfortunately, too many families who are desperately struggling to hold onto their homes during these incredibly difficult economic times find themselves vulnerable to predators,” said Cicilline. “As we continue our work with Rhode Island Housing and other community partners to stabilize our neighborhoods and protect families from losing their homes, it’s important to arm residents with the tools they need to protect themselves against fraud.”
“Con artists who prey on people facing the catastrophic possibility of losing their homes to foreclosure are becoming bolder in ramping up their reprehensible scams throughout our nation, and right here in Rhode Island,” Attorney General Patrick C. Lynch said in a statement. “My office’s Consumer Protection Unit works closely with Rhode Island Housing to prevent the residents of our state from falling for the scams being perpetrated by unscrupulous people posing as loan modification consultants or foreclosure specialists who, in reality, are only scrambling to pocket the money of their victims and run. Today’s event is another opportunity for us to get the message out about the right steps to take to avoid being victimized.”
Unfortunately, potential scam victims are easy to find. Mortgage lenders must publish notices before foreclosing on homes. There are private firms that compile and sell lists of these foreclosed properties and distressed borrowers. Predators may approach their targets in person, by mail, over the telephone, or by e-mail. They often advertise their services on television, radio, or the web, and in newspapers, describing themselves as “foreclosure consultants” or “mortgage consultants,” offering “foreclosure prevention” or “foreclosure rescue” services.
“With today’s announcement, Rhode Island Housing continues to be a struggling homeowner’s first line of defense against foreclosure and all the scams that can come with it,” said Langevin. “I strongly recommend using the Rhode Island Housing HelpCenter and all of its resources at the first sign of financial trouble.”
“It’s outrageous that companies are preying on homeowners made vulnerable by these tough economic times,” said U.S. Senator Sheldon Whitehouse in a statement. “It is important that Rhode Islanders ask questions and know the facts before pursuing offers to modify or refinance a home mortgage.”
Contact: Jo-Ann Ryan, 401 457-1258
jryan (at) rhodeislandhousing (dot) org
