Foreclosure Rescue Causing Problems for Homeowners

WNYC News | Jul 12, 2010

New York, NY —

As a growing number of homeowners face foreclosure, housing advocates say they're seeing a rise in so-called foreclosure rescue scams.

REPORTER: The homeowner is already in desperate financial situation and in walks a foreclosure rescue service. Oda Friedheim is an attorney with Legal Aid Society. She says one of her clients went into foreclosure and then got call.

FRIEDHAM: A scam outfit came to her house and basically promised her, "We're going to refinance your mortgage. It's going to be cheaper for you, we're going to save your home," and she would repeatedly ask, "I don't want to lose my title, right?" No problem.

REPORTER: Instead, Friedheim says, her client unknowingly signed over the deed to her house as a lawyer hired by the broker supervised the transaction. Often foreclosure rescue companies offer to buy your home, and let you rent it and eventually buy it back. This practice, in itself, is not illegal, but housing advocates say these companies target unsophisticated homeowners and misrepresent themselves.

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