San Francisco, CA -- Nonprofit housing counseling agencies and housing rights advocates agree: foreclosure rescue scams are still common in the Bay Area, and there’s no need for homeowners in distress to empty their pockets paying for private attorneys.
When the Tatakamotongas of East Palo Alto were having trouble making their mortgage payments after the sudden death of the family’s primary breadwinner, they decided to seek help with obtaining a loan modification to lower their monthly payments. In looking for legal help, they came into contact with a scammer.
“The advice they gave me was ‘Don’t make any more payments at all. The longer you are backed up, the more we can help you.’ And so of course I believed them,” says Mele Tatakamotonga.
The scammer, a private attorney, told them to stop paying their mortgage in order to qualify for a modification and charged them $3,000 for the assistance. After paying the fee, the family tried contacting the attorney, only to find that the phone number had been disconnected.
“Foreclosure rescue and mortgage modification scams are continuing and getting bolder,” says Vanitha Venugopal, program director of Community Development and Investment at The San Francisco Foundation.
She and other advocates say that because scams continue to be rampant, homeowners should never pay for help with loan modifications and other housing issues. They’re spreading the word that the free help offered by nonprofit housing counseling agencies that are certified by the U.S. Department of Housing and Urban Development (HUD) and by nonprofit legal services organizations is not only safe, but effective in helping families dealing with foreclosure.
The Tatakamotongas eventually found Community Legal Services in East Palo Alto, a nonprofit law office, which was able to collect the family’s money from the dishonest attorney, as well as assist them with obtaining a loan modification.
Maeve Elise Brown, Executive Director of Housing and Economic Rights Advocates (HERA) in Oakland, another organization that offers free legal aid, warns that scams are commonly carried out by unscrupulous attorneys.
Brown also says that the media needs to be wary of running scammers’ advertisements. Many homeowners looking for help contact scammers that they find through television and radio ads.
Housing counseling agencies do not only exist for homeowners in distress, adds Cheyenne Martinez-Boyette, the Homeownership Program Lead at Mission Economic Development Agency (MEDA) in San Francisco, a HUD-certified housing counseling agency. Others who are looking to buy a home can benefit from the information and advice dispensed by certified counselors.
About 40 percent of the occupants of foreclosed properties are tenants, according to Leah Simon-Weisberg, the legal director of Tenants Together. Tenants can also get free help from nonprofit legal aid offices.
Advocates agree that homeowners looking for help should know the following:
1. Don’t trust people who want you to pay them for help in obtaining a loan modification, or for other housing counseling services. Beware particularly of attorneys charging for these services.
2. Don’t trust people who tell you to stop making your mortgage payments in order to qualify for a loan modification.
3. Don’t submit mortgage payments to anyone other than your servicer without your servicer’s direct consent.
4. Don’t sign over your property deed to anyone unless your servicer is directly involved in the process. If you don’t understand what someone is asking you to sign, contact HERA at 510-271-8443, ext. 307.
For a list of HUD-approved housing counseling agencies, visit hud.gov. More information and resources can be found at MakingHomeAffordable.gov.
To learn more about free legal advice from Housing and Economic Rights Advocates (HERA), call 510-271-8443 or email inquiries@heraca.org. To learn more about other free legal aid programs, visit http://lawhelpca.org/.
If you are a tenant in a foreclosed home and need guidance, call Tenants Together’s Foreclosure Hotline at 1-888-495-8020.
For stories of Bay Area homeowners and tenants who have been helped by free legal advice, see the stories of the Tatakamotonga family, the Castillo family, the Camelo family, and the Jones family.