Avoiding Loan Scams

by Coldwell Banker Evergreen Olympic Realty, Inc. on July 8, 2009

With a great many homeowners around the country facing the prospect of foreclosure, the stage is set for scam artists to prey on these distressed people. In response to loan scams flaring up around the country, a national bankers association is offering tips to consumers to help avoid foreclosure relief scams.

We have not heard of too many of these scams being run in the Thurston County area, but consumers should nevertheless be on guard against illegitimate offers for relief against foreclosure. Thurston County has not experienced nearly the volume of foreclosures seen in the hardest hit regions of the country, primarily in 5 states, California, Arizona, Nevada, Florida and Michigan. Since the beginning of April, the county has averaged 36 foreclosure filings per week.
The following news release from The Independent Community Bankers of America, offers some useful tips to guard against these scams:

Washington, D.C. (July 7, 2009) — The Independent Community Bankers of America (ICBA) and the nation’s nearly 8,000 community banks are arming consumers with information to help protect themselves against loan scams.

“Many Americans are being targeted by scams that promise to help them avoid foreclosure or refinance their existing mortgage to a lower rate,” said R. Michael Menzies, ICBA chairman and president and CEO of Easton Bank and Trust Co., Easton, Md. “It’s essential that homeowners be vigilant and protect themselves against these scams so that they don’t wind up in an even worse financial situation.”

Consumers who are having financial troubles should contact their mortgage lender immediately. By doing so, they are less likely to be taken in by loan scams, which are almost always unsolicited phone calls, e-mails or letters. Knowing the warning signs is key. ICBA and community banks across the country encourage consumers to be wary of any company that does the following:

  • Guarantees to stop the foreclosure process—no matter what your circumstances.
  • Instructs you to not contact your lender, lawyer or credit or housing counselor.
  • Collects a fee before providing you with any services.
  • Accepts payment only by cashier’s check or wire transfer.
  • Encourages you to lease your home so you can buy it back over time.
  • Tells you to make your mortgage payments directly to them, rather than your lender.
  • Tells you to transfer your property deed or title to them.
  • Offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale.
  • Offers to fill out paperwork for you.
  • Pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand.

If consumers think they have been the victim of a loan scam, they should contact their state attorney general’s office to file a complaint and learn the next steps to repair any damage incurred as a result of the scam. For additional tips, consumers can also check the following resources:

“Any community bank customer who is having problems with a mortgage should visit a local community bank for more information about legitimate programs and loan options available to them,” said Menzies.

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