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Home loan modification scams on the rise
The Washington State Attorney General's office is warning residents that home loan modification scams are on the rise, as the legitimate process of helping homeowners throughout the state begins to move forward.
For Rochester, Wash., resident Vianna Engel, crossing paths with a scammer almost had disastrous consequences.
"If I lose my property, my elderly mother loses her home too," Engel explained earlier this week to the AG's office. Engel's mother lives on her property with her daughter. "She took care of me and I'm not going to let this happen."
Engel hit a rough patch recently, with a major surgery forcing her to pay over $5,000 in out-of-pocket expenses. Along with that, she received a foreclosure notice, then got scammed out of $2,500 by a company purporting to be home loan modification specialists. These kind of companies often require an upfront fee before they "modify" a person's loan, which is what happened to Engel.
"Offers of mortgage help for a fee exploit people in their darkest hours," said Attorney General Rob McKenna. "They convince people to pay a fee for something they can receive for free."
The Attorney General warns that residents should be on the lookout for "television and radio advertisements, flyers, mailings, e-mails and phone calls from those offering mortgage help for a fee." According to the AG's office, the scam artists comb through foreclosure filings to identify likely targets. The AG's office also notes that these offers come from companies with officious sound names that put people in mind of law firms or similar companies.
Both the AG's Consumer Resource Center and the Washington State Bar Association are reporting upticks in the number of people requesting information about companies like those described above. A common theme, the AG's office notes, is that the amount of money the scammers typically ask for ranges between $1,500 to $3,000.
For Engel, she trusted a company that she had seen advertised on television, the Home Credit Law Center. The company did nothing with Engel's $2,500, and instead it resulted in an additional $10,000 being tacked on in missed payments to Engel's loan.
McKenna advises Washington State residents to call the Washington Homeownership Information Hotline at (877) 894-HOME. The hotline connects homeowners to free counselors, and in some cases, pro-bono attorneys. Anyone who feels they may have fell victim to a scam is encouraged to file a complaint with McKenna's office online, at www.atg.wa.gov.