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As foreclosures increase, so do rescue scams
by Bill Healy
Oct 01, 2008
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A guide from the Illinois attorney general to help you avoid being ripped offRed Flags You May Be Dealing With Rescue Scam Artists
• The consultant promises to “save” the home or “stop” foreclosure, no matter what.
• The consultant offers to fill out paperwork for you or asks you to leave spaces blank.
• The consultant pressures you to sign paperwork that you haven’t had a chance to read.
• The consultant wants to collect a fee before providing you with any services.
• The consultant tells you to transfer title or give your deed to him or her.
• The consultant tells you to make mortgage payments to him or her rather than to your bank.
• The consultant instructs you not to contact your lender, a lawyer or a counselor.
Source: City of Chicago Department of Consumer Services
Know Your Rights Regarding Foreclosure Consultants
• By law, foreclosure consultants cannot collect any money until all services are complete.
• By law, foreclosure consultants must specifically list in writing all services that they intend to complete on your behalf.
• By law, homeowners facing foreclosure have the right to cancel a foreclosure consulting contract at any time before completion, even if the consultant has begun performing services for the homeowner.
Source: City of Chicago Department of Consumer Services
“If an offer to help sounds too good to be true, it probably is.”
That’s the word to people who are thinking about enlisting the aid of unscrupulous firms that promise to stop foreclosure proceedings, as officials have discovered more than 20 cases of foreclosure rescue fraud in Illinois.
The cases involve homeowners at risk of foreclosure who have been cheated out of their homes or asked to hand over money to individuals who falsely offer to help prevent foreclosure.
Now officials are filing suit against those who prey on homeowners desperate to stave off foreclosure.
The City of Chicago’s Department of Consumer Services, Cook County state’s attorney and Illinois attorney general have all filed cases against alleged foreclosure rescue scam artists, officials from each agency said Wednesday.
City consumer services department officials outlined two types of scams.
In the first type of scam, an “expert” offers to help prevent foreclosure for a fee. After collecting money, they do little to help and homeowners are left in a worse financial position.
In the second type, an individual offers to buy a house in danger of foreclosure and lease it back to the homeowner until they’re able to buy it back. Officials said the property is usually not returned and the homeowner can be evicted.
To date, the city’s Department of Consumer Services has filed six cases of foreclosure rescue scams, according to Consumer Services Commissioner Norma Reyes.
Robyn Ziegler, a spokeswoman for Illinois Attorney General Lisa Madigan, said Wednesday that Madigan’s office filed its 15th suit against suspected rescue scam artists earlier this week. Ziegler said that most of the cases were filed under the Illinois Mortgage Rescue Fraud Act, which went into effect last year.
Cook County State’s Attorney Richard Devine has also recently filed a case under the Mortgage Rescue Fraud Act.
Dean Morris is executive director of Nobel Neighbors, a homeowner counseling agency in West Humboldt Park. Morris said those at risk of foreclosure should seek housing counselors that are certified by the federal Department of Housing and Urban Development.
Morris said that if the agency doesn’t “have HUD’s stamp of approval, you don’t know who you’re dealing with.”
