Long Island foreclosure relief scams prompt warnings

Three organizations have issued a warning to Long Island homeowners regarding con artists who falsely promise to stop home foreclosure. According to the U.S. Department of Housing and Urban Development, the New York state attorney general’s office and Long Island Housing Services Inc., some creditors have been dishonest by “giving the false impression that they are affiliated with government programs, charging illegal up-front fees and executing fraudulent lease-back financing schemes.”

LIHS statistics indicate that 82 homeowners in Nassau and Suffolk counties filed complaints in the first eight months of 2012, claiming losses totaling more than $500,000. Based on numbers from the Lawyers’ Committee for Civil Rights under Law, at least 177 homeowners from the two counties filed similar complaints in 2011.

Given current economic conditions, the targeting of local homeowners provides devious lenders with an all-too-ample supply of financially desperate people. As of July, more than 11 percent of Long Island home loans were in distress, which means they were delinquent on payments by at least 90 days, going through foreclosure or being repossessed by lenders.

Homeowners are encouraged to contact LIHS, the attorney general’s office or HUD to learn more about mortgage-related fraud or report possible scams. Federal and state authorities have seemingly started to be more vigilant for mortgage fraud after the first years of the housing crisis passing without much relief. One of the biggest warning signs to if someone wants to collect up front for help with your mortgage. Some potential choices that are more realistic to avoid foreclosure include refinancing, negotiating a loan modification with your lender, or filing for Chapter 13 bankruptcy.

Source: HUD.gov, “HUD and Long Island Housing Services join forces to warn homeowners about foreclosure rescue scam artists,” Oct. 11, 2012