Many people who are having difficulty paying their mortgage, whether owing to a rate increase or recent unemployment, are becoming paralyzed by the fear of being subject to a scam and worsening the situation. Many homeowners are routinely receiving solicitations in the mail or by phone for organizations that claim to guarantee to save the recipient’s home from foreclosure. Some offer renegotiation services, some offer shady ways to exit a loan obligation while claiming to protect the person’s credit rating.
KVCR has been talking with many private and non-profit organizations that assist people with their mortgage difficulties through seminars, counseling, and one-on-one assistance. Many are free, but some are paid services. The fact an organization requires compensation does not automatically make it fraudulent; despite some information being disseminated to the contrary; however, the fees are reasonable and the promises of service are appropriately guarded. The fact is, no one can guarantee success in this climate of bank hesitancy (a subject of a future post).
What to look for. HUD counselors are free. Lawyers may be free or paid. Organizations may request a donation. Most legitimate organizations provide their services in part or completely through donations and grants, and are straining under the weight of the increased demand for services. Hence, they do not have the budget to advertise on television, send soliciation letters, or run advertisements. Those that do have such a budget are usually for-profit and highly profitable, i.e. they don’t do much for the money they receive, giving them the surplus needed to pay for ads and mail drops. If you have to work to find an organization, it’s more likely to be a non-profit and legitimate than if you wait and someone calls you or send you something in the mail (there are exceptions). Check the organization out by calling your local 2-1-1 service, from any phone, and asking if it is in their resource directory. Only legitimate organizations are listed in 2-1-1’s internal systems.
KVCR is working with the Los Angeles Department of Consumer Affairs and our 2-1-1 services in every county to compile a list of legitimate sources you can rely upon. Look for future information soon.
Fri, Jun 19, 2009
Avoiding Fraud, Facts & Info