A foreclosure sign is seen on the lawn of a home for sale.
Those falling behind on their house payments are increasingly being targeted by scam artists. Authorities say it's a problem that is likely to get bigger as more homeowners face foreclosure.
The deputy district attorney's office has moved to protect homeowners, by sending out pamphlets to people who are late paying their mortgage or have received what's called a notice-of-default.
"We've seen a lot more activity in people taking advantage of distressed homeowners and we want to make sure they know how they're protected," said Michael Groch, Head of the Economic Crimes Division at the Deputy District Attorney's Office.
He said those offering services to help those facing foreclosure:
- Cannot accept money up-front
- Cannot take an ownership interest in the home
- Must provide a written contract detailing services offered, including how the contract can be terminated
Groch says not following these guidelines could be a misdemeanor or a felony. They can carry a maximum sentence of up to three years in prison. Pamphlets will be sent to those who have received notices of default. These are the same lists used by those looking to offer services to struggling homeowners.
"We are funded by grants so we can represent homeowners in renegotiating their loan with their lender," said Avena.
She said some of her clients have been paid $2,500 to $5,000 up front and received nothing in return.
Groch says some have given away partial ownership of their homes or signed a power of attorney to those claiming to be foreclosure consultants. Both are illegal.
For more information on home loan counseling, visit HUD.gov. For consumer protection information, go to SDCDA.org.