BBB warns of shady foreclosure rescue firms

“Many people are losing an awful lot of money and their houses through these unethical foreclosure rescue operations,” Nalven says.

In Ohio, tens of thousands of foreclosures are under way. No surprise then that 21 new mortgage rescue services have opened there in the past year.

“Katherine” (she asked me not to use her real name) was trying to save her house in Columbus when she got a letter from Foreclosure Solutions LLC of Cincinnati.  She says they “guaranteed to help stop a foreclosure.”

Katherine was desperate, so she signed up. That was in April. She never heard from them until the beginning of August, just days before her house was set to be sold.

“It is very sad and very upsetting that they would take advantage of people like this,” she said.

Katherine was lucky — she only lost $1,150 and not her house. A friend in the real estate business was able to talk to her lender and worked out a new payment plan. Katherine tried to get her money back from Foreclosure Solutions, but they wouldn’t talk to her.

In an e-mailed response to me, Sheral Skirvin of Foreclosure Solutions wrote:

“Foreclosure Solutions LLC doesn't engage in consumer fraud.  Foreclosure Solutions LLC, in business since 2003, has helped nearly 5,000 consumers keep their homes. We are tired of being kicked around and being grouped with people who don't do their jobs. We have not been investigated."

Last month, Ohio Attorney General Marc Dann filed lawsuits against Foreclosure Solutions and five other companies he accuses of “preying on Ohioans with false promises of saving their homes.” Attorney General Dann tells me more investigations are underway.

Skirvin claims that his company has not been contacted by the Attorney General's office.

Where to get help A million families will face losing their homes this year. “Act, don’t avoid,” says Douglas Robinson with NeighborWorks America. “Call someone because the longer you wait, the harder it gets.” Homeowner’s HOPE Hotline National Foundation for Consumer Counseling HUD: Find a Housing Counselor

“It’s despicable,” Dann says. “Money that could be spent to hire a lawyer to help represent your interests or used to work out a deal with your mortgage company is being given to these scam artists who are cashing the check and walking away.”

Dann says his investigation found that these companies didn’t even contact the lenders foreclosing on their client’s homes.

What to do
There is no easy answer to this problem. Experts say you should take action at the first sign of financial trouble. Start by calling your lender.

“Homeowners are really much better off calling their mortgage servicing company themselves,” says Allison Brown with the Federal Trade Commission, “rather than paying a large fee to somebody who’s calling them up and offering them help.”

If that doesn’t work — and it might not — talk to a reputable, non-profit housing counselor.

Dann says anyone who uses a mortgage rescue company is almost certain to wind up in worse shape. “There is nothing a non-lawyer or non-HUD certified mortgage counselor can offer you that would improve your situation in a foreclosure that’s worth a dime,” he says.

The bottom line: Never trust anyone who contacts you, unsolicited, and who promises to help save your house from foreclosure. NEVER!

More Information

• Mortgage Foreclosure Scams on the Rise, Warns the BBB
• Mortgage Payments Sending You Reeling? Here’s What to Do

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