Foreclosure Prevention: Don’t Get Scammed
When mortgage borrowers fall behind on payments and run the risk of losing their homes, they sometimes grab the first lifeline tossed their direction. Often that lifeline is a TV or Internet advertisement making grand promises – and has more than one string attached.
There are many rescue scams that are after your business. They’re guaranteeing something they can’t and charging a lot. Even the legitimate for-profit services demand a high pay-out up front.
If you are in trouble and need help to fight off foreclosures, you should ask several questions before hiring anyone.
1. How much does the service cost? “You should never pay a nickel for foreclosure-prevention counseling,” said Austin King, a spokesman for the community organizer Acorn. “The companies that charge for this service are profit driven, not mission driven, and they can charge up to a couple of thousand dollars for doing an hour’s work.”
2. How long has the organization performed foreclosure-prevention counseling? Longer, of course, is better. Counselors should be fully up to speed on how to handle the particular problems of their clients. Each case may be unique, but experienced counselors can apply what they’ve learned to other particular cases.
3. Does the counselor have a direct pipeline to your servicer’s mortgage-modification department? Many foreclosure counselors have established working relationships with the mortgage-mitigation specialists at the lenders. These are the people authorized to offer workouts to defaulting mortgage borrowers.
4. Do they have an “in” with a decision maker who can override the mortgage mitigation department? Some foreclosure counselors have a servicer’s VP for mortgage mitigation on speed dial. If they can’t get a desired outcome from the people they usually deal with, they can call the higher-ups and sometimes get them to override decisions.
5. Does the counselor stay with you every step of the way? Often once a client is assigned a caseworker, that person sticks with the borrower throughout the foreclosure prevention process.
That’s important. One of the problems that defaulting borrowers have in dealing directly with lenders is they tend to get bounced around from one mortgage mitigation specialist to the next. Filtering everything through a single counselor can save time, which is often in short supply for at-risk borrowers.