The Sky Is Falling- Here Are The Umbrellas: How To Choose Foreclosure Assistance You Can Trust

By: Beedy Plauche

Losing the family home to foreclosure can happen for many reasons including long term unemployment, illness, unethical mortgage practices, etc. For whatever reason, having your home foreclosed upon can be devastating. Facing foreclosure can cause homeowners to become desperate. Desperation can leave people vulnerable. Unfortunately, there seems to be people who choose to prey on desperate homeowners by offering to assist them and then failing to deliver the 'relief' or assistance they promised. Some scam artists are content to trick homeowners out of money; others actually seek to obtain ownership of the house through fraudulent means. Does this mean that everyone who offers foreclosure services for a fee are frauds? Of course not.

The foreclosure services industry is just like any other- there are good and bad apples in any bunch. For example, the United States has a fine tradition of generously responding to natural disasters with money, goods, and services. When disasters strike the bad apples also come out and solicit donations. This does not mean one cannot trust anybody who is trying to help disaster victims, just as it does not mean that there are no financial service providers who can be trusted to help when someone is facing foreclosure on their home. It does mean that if a homeowner wants legitimate help he or she should 'arm' themselves with some facts so that they can have confidence in the choice they make in service providers. If someone has already lost a home or they are currently in the foreclosure process or they are struggling to catch up on the mortgage payments, there is help available. Here are some facts that can help people find the assistance they may need:

1. The National Mortgage Settlement provides help for borrowers and for those who lost their homes due to foreclosure (between 2008 and 2011) who were serviced by Wells Fargo, Bank of America, Citi, JP Morgan, or Ally/GMAC. The relief includes cash payments to borrowers who lost their homes to foreclosure in that time span. These payments are expected to begin to be distributed early this year. Under this settlement the lenders mentioned above are making available loan modifications and other methods to help distressed homeowners. Accordingly, they are contacting eligible borrowers, some of whom may think it is a scam even though it just might be the means for them to keep their home. If someone is currently facing foreclosure, this settlement also provides other relief to homeowners desperate to avoid foreclosure, like refinancing at today's interest rates, as well as reducing the principle that eligible borrowers owe. To find out more read all about the settlement on the U.S. Dept. of Justice website.

2. The MARS Rule- no, this has nothing to do with the red planet or the candy bar. The Federal Trade Commission describes the MARS Rule as follows: The Mortgage Assistance Relief Services (MARS) Rule makes it illegal for companies to collect any fees until a homeowner has actually received an offer of relief from his or her lender and accepted it (see the FTC website). What does all this mean? Well, if someone decides to hire the services of a company to assist them to keep their home they don't have to pay for such services until they are offered the solutions they want. The MARS Rule also makes it illegal for any foreclosure services firm to tell anyone that they represent the government. It also prevents such firms from encouraging borrowers to avoid talking to their lender. Bottom line- by getting informed about a few laws people can gain the skills they need to differentiate between the scam artists and the legitimate foreclosure service providers.

3. There are numerous governmental agencies and other organizations available to assist someone who is faced with foreclosure. These include-

Private Organizations:
NeighborWorks America
The HOPE NOW Alliance
The Homeownership Preservation Foundation at 1-888-995-HOPE

Ally/GMAC: 1-800-766-4622
Bank of America: 1-877-488-7814
Citi: 1-866-272-4749
JP Morgan Chase: 1-866-372-6901
Wells Fargo: 1-800-288-3212

Federal Government Foreclosure Assistance Agencies/Programs:
The National Mortgage Settlement Administrator: 1-866-430-8358
The Making Home Affordable Program
Fannie Mae
Freddie Mac
The Federal Housing Administration
The U.S. Trustee Program
U.S. Dept. of Housing and Urban Development

Federal Government Scam Prevention/Reporting Agencies/Depts:
The Federal Trade Commission
The Financial Fraud Enforcement Task Force at
The Dept. of Justice
Independent Foreclosure Review
The Federal Consumer Financial Protection Bureau
HUD Office of Inspector General
The Office of the Comptroller of the Currency. The OCC provides consumer tips
Residential Mortgage Backed Securities Fraud Working Group (U.S. Securities and Exchange Commission)

Private Business Reviews and Scam Prevention Information:
The Online Business Bureau
The Better Business Bureau
Loan Modification Scam Prevention Network

Legitimate options are available to help people save their homes. One example is the Making Home Affordable Program, which can help people who are currently struggling. If someone wants to hire the services of a foreclosure 'relief' firm there is a great deal of information available to help make such a transaction a win-win situation for both the homeowner and the service provider.

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