A New Predator has Arrived

I just read an article in the New York Times that I found truly upsetting. First we had predatory lenders now we have predatory "foreclosure rescue companies". It seems these people represent themselves to homeowners as being able to negotiate with their lender to lower their interest rate. This is with a fee of course. The article mentioned a lady who was struggling to make ends meet and these "negotiators" offered their help for $1000. She managed to pay $500 from her first paycheck and $500 two weeks later. Her home is now in foreclosure and she is waiting for the sheriff to evict her. She cannot find the man she paid to lower her rate.

In California and 20 other states, including New York, companies are prohibited from collecting payment until they have completed their services, something she did not know. In Colorado, the attorney general’s office has closed 15 mortgage rescue companies that charged fees up front.

Often the scammers represent themselves as having connections to government groups, or copy the name and typography of the Hope Now program, an alliance of nonprofit, government and lending agencies, said Marietta Rodriguez, director of national homeownership programs at NeighborWorks America, a nonprofit group that provides free government-certified foreclosure counseling through 235 local organizations.

“Our advice to consumers is to contact their loan servicers directly or to call Hope Now or HUD-approved housing counselors,” she said.

It saddens me to see this type of behavior. We are all affected by the financial crisis that we are in. How about we all work together to get out of it?