Beware of Foreclosure Assistance Programs

September 16, 2007 No Comments »

As foreclosures continue to rise, more “angels” are on the lookout for people to “save”.

If you’re behind on your mortgage payments, you may have noticed an increase in solicitations via mail or telephone from companies offering to help you cure your foreclosure blues.

Well, before you agree to be saved, do some research online, or ask for some referrals, otherwise you could land in even more hot water.

Such was the case in Texas, where homeowners who sought support from foreclosure assistance companies found themselves out $1,200 or more, with no solution to their impending problem, according to a story from Click2Houston.

One woman said she paid a company named Foreclosure Assistance Solutions (also known as Mortgage Second Chance) $1,800 after falling behind on her mortgage payments, and was told not to speak to her own mortgage lender regarding the matter.

“They told me; do not attempt to contact a mortgage (company). If they call you in any way, just cut all ties with them. We will deal with them. And that is what they told me I was signing. That was not the case,” Flores said.

As a result of this case and many others , two foreclosure assistance companies have been temporarily barred from doing business in the state of Texas after a district judge in San Antonio ruled in favor of distressed homeowners.

Texas Attorney General Greg Abbott announced Friday that Foreclosure Assistance Solutions of Clearwater, FL, and J.W.W. Services Inc. of San Juan Capistrano, CA have been temporarily banned from offering their services in Texas.

According to the lawsuit, the companies mailed postcards and letters to homeowners whose mortgage payments were delinquent, requesting a fee to save the homes from foreclosure.

“They have been ripping them off of more than just the money that the homeowners have paid to FAS,” Abbott said in a statement. “FAS has been ripping off homeowners of their dreams for the opportunity to own a home in the state of Texas.”

The Better Business Bureau in Clearwater, FL received 236 complaints regarding the foreclosure assistance companies, 43 of them from Texas residents.

There are undoubtedly numerous other foreclosure assistance companies out there just waiting to prey on homeowners, so be sure to take the time to thoroughly review any company you decide to work with.

But before you contact one of these companies, it is recommended that you work with your current lender to iron out a foreclosure alternative if at all possible.

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