Beware of “Foreclosure Rescue” Companies

by Rodney Forbes on August 1, 2009

Recently the Florida Attorney General filed suit against several “foreclosure rescue” companies who tout to help homeowners in distress. Read the following exceprt as a warning about those who prey on homeowners facing a short sale or foreclosure.

State regulators filed a lawsuit in Palm Beach Circuit Court Tuesday against four South Florida mortgage loan modification companies they say were collecting a total of up to $1 million in monthly fees, as the Attorney General’s Office cracks down on the foreclosure rescue industry.

Officials said the operations, which were related, illegally used President Barack Obama‘s voice in telemarketing calls and charged up to $5,000 up front to modify home loans, a violation of the 2008 Foreclosure Rescue Fraud Prevention Act. The state is seeking restitution for consumers, civil penalties and the companies’ dissolution.

FHA All Day.Com, Inc., Safety Financial Services, Inc., Housing Assistance Law Center PA and Housing Assistance Now, Inc. were named in the suit, as well as Jason Vitulano, the owner of FHA All Day and Safety Financial. Attorney General spokeswoman Sandi Copes said the state has received a total of 300 complaints about the four businesses, which were based in Delray Beach, Boca Raton and Deerfield Beach.

One filing came from Kim Kyzar. She decided to try to lower the 8.1 percent interest rate on her Lake Worth house after receiving an FHA All Day marketing call featuring Obama talking about low-rate mortgages under the stimulus act.

She said she and her husband, who have an air conditioning business, paid FHA All Day $2,000 up front in March for a “forensic loan document review” plus another $500 for legal costs. But Kyzar became suspicious when the company stopped returning her phone calls in the middle of April. Going to the Boca Raton office, she found it empty.

Source: Diane Lade and The Sun Sentinel

Be very careful. If you are in a distress situation don’t make it worse by paying huge upfront fees to any company. There are reputable loan modification programs around. But only pay a fee for a successful loan modification after it’s complete, or work it out with your bank by yourself.

If the bank recommends a short sale of your home contact a real estate company that specializes in short sales, such as Forbes Realty of South Florida.

Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc. Rodney has co-authored the book “Should I Short Sale My Home?”. Get your FREE copy at www.SouthFloridaRealEstateReport.com

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