Attorney General Warns Consumers to Avoid Foreclosure Sharks

BALTIMORE, MD ( March 8, 2010) - Just as sharks smell blood in the water, foreclosure rescue scammers can pick out desperate homeowners on the brink of foreclosure. Many homeowners are unaware of their options and panic. In the latest issue of The Consumer’s Edge, Maryland Attorney General Douglas F. Gansler warns homeowners and consumers of foreclosure rescue scams, and offers tips on how to avoid them.

Scam artists learn of homeowners in distress by scouring through public foreclosure notices in newspapers and government offices. Offering “foreclosure rescues,” “mortgage consulting” or “foreclosure services,” they contact the homeowners by phone, in person or by mail, promising a fresh start only if the homeowners act immediately. With promises to save the homeowners from foreclosure, scam artists dupe desperate homeowners out of money by:

• Charging exorbitant fees for phone calls and paperwork that the homeowners could complete on their own. Homeowners aren’t provided with meaningful help, but rather lose precious money and time that they need to save their home from foreclosure;
  
• Convincing homeowners to sign over the title of their home with the belief that they will be able to live in the house as renters and eventually buy the house back over time. The rent is often too high and so burdensome that buying back the home becomes impossible and the scam artist walks away with all or most of the home’s equity;
  
• Getting homeowners to sign documents for a new loan to make the mortgage current, but in reality they are signing over the ownership of their home.

“Homeowners who are in default need to understand there are still options available for them,” said Attorney General Gansler. “They should contact my office to learn about resources, rather than panicking and making themselves vulnerable to unscrupulous folks.”

For more information on foreclosure rescue scams, visit www.oag.state.md.us/Consumer/138.pdf to read The Consumer’s Edge Edition 138. Consumers with questions or complaints should contact the Consumer Protection Division at 410-528-8662 or 1-888-743-0023.

The Office of Attorney General distributes The Consumer’s Edge to more than 900 businesses, agencies, schools and community associations. Groups interested in receiving a monthly issue should call 410-576-6956 or e-mail consumersedge@oag.state.md.us to be placed on the distribution list.