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Ohio homeowners cautioned about mortgage scams

The economy and foreclosure crisis have left many distressed homeowners looking for options to save their home from falling into the foreclosure statistics. A number of unscrupulous companies have arisen that prey on distressed homeowners on Ohio. A recent report put out by a number of consumer groups, including the Miami Valley Fair Housing Center of Dayton, Ohio, (MVFHC) has identified a number of tactics that continue to be used to prey on homeowners in default on their mortgage.

The report says a large number of companies, as many as 150 identified in the year-long study, have sprung up promising to help in stopping mortgage foreclosures. MVFHC President Jim McCarthy says it is clear many Ohio "residents are vulnerable to these pernicious purveyors of false promises." The report says many scammers pose as home loan modification companies who lure distressed homeowners with tantalizing promises, including guarantees of reduced mortgage payments and retention of the family home. The trouble is, according to the report, despite the guarantees, the scammers fail to follow through on their promises.

The report, "Have I Got A Deal For You!," issued by the National Fair Housing Alliance, MVFHC and other organizations says the scammers often have official looking websites, official sounding names and "make statements with 'as seen on' CNN, MSNBC, FOX or Oprah" to enhance their credibility. The scammers also use e-mail, direct mail and telephone solicitations to prey on homeowners.

The MVFHC says in the Miami Valley area, the organization found that 63 percent of the scam companies required some type of upfront payment for their services, compared with 55 percent of the companies nationally. The full report indicates that the upfront fees could be as high as $3,000 to $4,500.

The MVFHC has several suggestions for Ohio homeowners to detect a potentially suspect company. The organization suggests homeowners be wary of company solicitations that:

  • Require fees in advance of performing services
  • Promise to find errors in loan documentation that will void the contract or force a modification of a home loan
  • Provide a guarantee to halt a mortgage foreclosure or a guarantee of a successful loan modification
  • Provide advice to halt all mortgage payments without communicating with the bank holding the mortgage.

The report is based upon a study conducted between April, 2010, and March, 2011.

Source: WHIO Dayton, "Mortgage Modification Scams Revealed By Housing Group," 7 Apr 2011

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