Foreclosure scams target people struggling with their mortgages

At 8.5%, New York has one of the highest unemployment rates in the nation.  One of the effects of unemployment is that homeowners throughout NY may also be struggling to pay their home mortgages and may even be facing foreclosure.  Unfortunately, there are many fraudulent companies out there that are keeping a close look at those possibly facing foreclosure.  These foreclosure scams:

  • advertise over the Internet and in local publications
  • distribute flyers
  • contact people whose homes appear in the foreclosure notices (they can easily find these notices online or in a local newspaper)
  • target specific religious or ethnic groups

If you are facing foreclosure, contact your lender immediately to see if they can help you renegotiate your current loan. Often, the lender is willing to work with the homeowner because they may also lose money if the house goes into foreclosure. You may also contact a lawyer for help.  Click here for a list of foreclosure legal aid providers in New York.

These foreclosure scams often promise to negotiate with your lender, help stop foreclosure by filing for bankruptcy or help make it easier to make payments by asking you to sign over your house to them and make smaller rental payments to them until you can afford to buy the house back later. They will then file for bankruptcy without following through with it, which allows foreclosure proceedings to continue so you may still lose your house and have a bankruptcy listed in your credit history for years.

If you think an individual or company is running a mortgage foreclosure scam, you may file a complaint with the Federal Trade Commission (FTC). If you think an individual or company is running a mortgage foreclosure scam that involves bankruptcy, you may contact the local office of the U.S. Trustee Program.

Additional Resources:

**Thank you to USA.Gov for the information on this blog post**