Karen Huber County Commissioner: Precinct Three Report

Avoiding or Dealing with Foreclosure: A Few Tips

You may recall a news story last month about rising foreclosure rates in Travis County. Though Texas has largely stayed above the fray of our country’s real estate woes, it is clear that we are not immune. So far in 2009, Travis County has seen approximately 4,000 foreclosure postings, compared to 2,089 this time last year.

Recently, Travis County underwrote a $50,000 grant to Frameworks Community Development Corporation. Frameworks helps to make homeownership possible for lower income families by providing homebuyer education and counseling to new homebuyers, as well as intervention services to help prevent the threat of foreclosure. In the past eighteen months, the Foreclosure Counseling services have resulted in an average mortgage payment reduction of $305 per month! I encourage prospective first-time homeowners or those who might be at risk of foreclosure to contact Frameworks at 512.385.1500 or visit their website: www.FrameworksCDC.org .

Unfortunately, tough times bring out scammers who prey on the vulnerable, such as those at risk of foreclosure. Below are tips on how to identify a foreclosure scam, courtesy of Jeff Rose of the Texas Attorney General’s office. Read these tips carefully and call the AG’s complaint hotline at 1-800-252-8011 if you suspect something is amiss.

“Pay us $1,000, and we’ll save your home.” Some legitimate housing counselors may charge small fees, but fees that amount to thousands of dollars are likely a sign of potential fraud – especially if they are charged up front.

“I guarantee I will save your home – trust me.” Beware of guarantees that a person or company can stop foreclosure and allow you to remain in your house. Unrealistic promises are a sign that the person is unlikely to provide services that will actually help you.

“Sign over your home, and we’ll let you stay in it.” Signing over the deed to another person gives that person the power to evict you, raise your rent, or sell the house, though you still will be legally responsible for paying the mortgage on it.

Sham Legal Loophole Arguments – “Your lender never had the legal authority to make a loan.” Do not listen to anyone who claims that “secret laws” or “secret information” will be used to eliminate your debt and have your mortgage contract declared invalid. These arguments will only leave consumers worse off than when they started.
Seeming Affiliation with Government – “Call 1-800-Fed-Loan” or “Federal Foreclosure Stimulus Relief.” These could be a scam, especially where a consumer is being asked to pay money to take part in a Government sponsored program. You do not have to pay to participate in legitimate government programs. All you need to do is contact your lender to find out if you qualify.

Bad Advice

“Stop paying your mortgage.” Do not trust anyone who tells you to stop making payments to your lender and servicer.

“If your lender calls, don’t talk to them.” In reality, your lender should be your first point of contact for negotiating a repayment plan, modification, or short sale.
“File for bankruptcy and keep your home.” Be aware that some scammers will file bankruptcy in your name, without your knowledge, to temporarily stop foreclosure and make it seem as though they have negotiated a new payment agreement with your lender.

High Pressure Sales Tactics – A Sure Sign of Trouble

Pressure to Sign – “Just sign this now; we’ll fill in the blanks later.” Take the time to read and understand anything you sign. Never let anyone else fill out paperwork for you. Don’t let anyone pressure you into signing anything that you don’t agree with or understand.

“Why haven’t you replied to our offer? Do you want to live on the streets?” If someone continually contacts you and pressures you to work with them to stop foreclosure, do not work with that person. Legitimate housing counselors do not conduct business that way.