Fake ‘Rescue' Services Flooding Foreclosure Crisis

When someone's home hangs in the balance they are tempted to reach for the first rescue offer that comes along.  But consumer advocates warn you to be careful of falling for fake or bad foreclosure "rescue" services and loan modifications.

You need to be very cautious, according to Attorney General Bill McCollum, who said that loan offers amounted the most frequent complaints to his office in 2008.  McCollum urges homeowners who are facing foreclosure or default to contact their lender directly before reaching out to a third party.

Here are four tips to keep you safe:

Avoid businesses that guarantee to save home from foreclosure.

  • Without knowing your particular circumstance, no loan "rescue" service can make that sort of guarantee.

Avoid businesses that use names or symbols, which mimic federal and state programs. 

  • Questionable companies will try to make you think that they are connected with the government in some way.  They will falsely suggest that they offer legal services or are affiliated with an attorney or law firm.

Do not work with anyone who instructs homeowners not to contact their lenders. 

  • Many times those businesses will try to isolate you into making poor decisions.  Some will require you to mail mortgage payments directly to the business or individual.

Before doing business with any loan modification business, check it out fully. 

  • Get the company's physical address, ask for the names of its corporate officers and check it out.
  • If you feel you have been ripped off, contact the State Attorney General or District Attorney's Office.
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