Legitimate resources for those facing foreclosure

August 27, 2014 18:39 by Consumer Ed

Dear Consumer Ed:

I lost my job last year when my company down-sized.  I have gone through all my savings and even borrowed money from relatives, but I just can’t keep up with my mortgage payments.  I’m afraid that the bank will foreclose on my house.  Is there any help available to me?

Consumer Ed says: 

Unfortunately, you’re not alone in this situation.  Fortunately, there are several state and federal programs that can help some people having difficulties making their mortgage payments.

Your first step should be to contact your mortgage company directly.  Many are willing to discuss your current situation and to try to come up with a solution, including a loan modification, deferment, or
repayment plan.  Look at your mortgage bill to find the name and contact information for your particular mortgage provider.

For consumers who began experiencing difficult times within the last 36 months, Georgia offers several programs.  Go to www.homesafegeorgia.com to find a summary of the programs available, requirements for eligibility, and how to start the application process.  These programs are provided in the form of a loan at 0% interest, and the loan is forgiven after five years if you stay in your home.  The Georgia mortgage assistance programs are:

  • Mortgage Payment Assistance – Provides monthly mortgage payments directly to lenders for up to 24 months to assist unemployed and underemployed homeowners.
  • Reinstatement Assistance – Assists homeowners experiencing a hardship by offering a one-time payment to catch up on missed mortgage payments.
  • Mortgage Payment Reduction (Recast and Modification Assistance) – Assists homeowners experiencing a permanent reduction in income by paying the lender a one-time $30,000 payment to lower the monthly mortgage payment.


The federal government also has several loan modification programs available to struggling homeowners.  Unlike Georgia’s programs, the federal programs aren’t loans, but ways to change the actual terms of your mortgage to make the payments more manageable.  You can find out more about these programs at www.makinghomeaffordable.gov.  The federal programs include:

  • Home Affordable Modification Program (HAMP) – Modifies the terms of the mortgage to lower the monthly payments.
  • Principal Reduction Alternative (PRA) – Assists homeowners who owe more than their home is worth by reducing the total amount owed.
  • Home Affordable Unemployment Program (UP) – Assists unemployed homeowners by temporarily reducing or suspending mortgage payments.


BEWARE!  Unfortunately, foreclosure prevention scams have increased because of recent tough economic times.  Before consulting a provider who claims it can prevent your foreclosure, there are a few things you should do to avoid getting ripped off.  For example:

  • Avoid individuals/companies promising they can halt your foreclosure – These companies cannot guarantee a particular outcome, so their promises are unrealistic (and, most likely, a lie).
  • Always send your mortgage payment to your lender or the mortgage servicer – Even if someone is assisting you in the process, make sure to send your payments directly to your mortgage company or someone approved by your mortgage company, not to any other intermediary.  
  • Avoid providers who charge up-front fees – Federal law makes it illegal for mortgage assistance relief services to collect fees before you enter into any negotiated agreement about your mortgage with your lender.
  • Never sign over your deed to anyone without consulting an independent lawyer whom you select - Some companies will attempt to have you sign over your deed, often claiming that you’ll remain in the home under a lease while they negotiate on your behalf.  This situation almost never ends well, because you no longer have ultimate control over the ownership (or occupancy) of your home.  You should never sign over your deed without first consulting an attorney that hasn’t been chosen by the provider.
  • Always read what you are signing- Some individuals may attempt to trick you into signing over the deed to your property by burying it in other paperwork.  If you don’t understand every item and every page of all documents you’re being asked to sign, DO NOT sign any of them until you have received a complete explanation from someone whom you trust, and who does understand.
  • If the provider makes any promises, get all of them in writing.
  • Don’t do business with any provider that tells you not to contact your mortgage company - Any legitimate service provider should, and will, encourage open communications between you and your lender.


Before making any decisions, contact a counselor or organization to assist you in making the right choices regarding your mortgage.  The following are great resources to learn more about the available programs and the steps required for each:

  • HUD sponsored counseling agencies may be able to provide free advice to help you avoid foreclosure.  Locate an approved counselor near you by going to www.hud.gov.
  • The Home Ownership Preservation Foundation is a non-profit organization providing free counseling to help you learn about the programs available to you.  Call them toll free at 1-888-995-HOPE (4673).


Working with mortgage companies to avoid a possible foreclosure can be overwhelming, but with proper support, you can make the best decision for your family and your home.  Be proactive and seek out the programs and counselors that will work in your best interest. And, don’t wait until the last minute to do so – give yourself as much time as possible to seek a solution that fits your situation.

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Emergency Medical Alert Scam

August 15, 2013 18:36 by Consumer Ed

Dear Consumer Ed:

I have been receiving automated phone calls saying that I qualify for a free emergency medical alert system. To accept, I'm instructed to press 1; to decline, press 2. When I hit "1" to accept I was asked to provide my bank account information. I was afraid it might be a scam so I hung up. But now I keep getting these calls, even though I have declined the offer numerous times and even asked to be removed from the contact list. What can I do?

Consumer Ed Says:

You did the right thing in refusing to provide your bank account information. A scam like the one you describe has been reported to be occurring around the country. Callers impersonate a company offering a free emergency medical alert system, but they're really just scammers trying to get you to provide your credit card or bank account information so they can take your money.

You should report such calls to the Federal Trade Commission ("FTC") by visiting ftc.gov or calling 1-877-FTC-HELP (1-877-382-4357). You should also contact your phone company to request that calls from that number be blocked.

To avoid unwanted telemarketing calls, a lot of people choose to register their phone numbers with the National "Do Not Call" Registry (www.donotcall.gov). While this is a good idea, it will only keep your number out of the hands of legitimate telemarketers. Scammers tend not to honor that registry. However, being on the Do Not Call list can make it easier for you to spot a scam since you will know that any solicitation from a company that you do not have an existing business relationship with, and that is not a charitable or political organization, is not a reputable business.

Remember - free means you don't have to pay anything. So if someone calls and offers you something for free in exchange for your banking information, hang up the phone. 

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Up-front processing fees for loan may indicate scam

November 26, 2012 22:37 by Consumer Ed

Dear Consumer Ed: 

I applied for a loan online. I then received a call from business reps from an out-of-state bank telling me that my loan had been approved but that I had to pay a $120 processing fee via Green Dot MoneyPak card. I got the card and gave the number to the business rep, who then asked for $300 for another processing fee. I bought another card and gave them the number.  They then asked me to pay another fee, and I realized I was being scammed.  Is there any way I can get my money back?

Consumer Ed says: 

It is a violation of Georgia’s Fair Business Practices Act for someone engaged in telemarketing to employ a scheme to defraud another person or to commit theft.  If the bank violated the telemarketing laws when they called you about the loan, you may want to consult a lawyer to learn about potential legal claims against the company.  You should also report your situation to the Attorney General’s Office and the Department of Banking & Finance in the State in which the bank is headquartered. They may be able to take action if the bank engaged in illegal activities. 

However, it is important to realize that the representative who called you may not have actually worked for the bank, and that, unfortunately, you may have been the victim of a scam.  In that case, you are very unlikely to recover your lost money since the representative who called you will not be easily traceable.  Regardless of whether or not this was a scam, you should also report your situation to the following government agencies in order to attempt to recover your money and to spread the word about the possibility of a scam:


Another avenue worth exploring is attempting to recover your money from Green Dot MoneyPak.  As the seller of prepaid cards, Green Dot MoneyPak is required to include the terms of use in the packaging that accompanies the cards at the time of purchase, as well as making such terms available upon request.  Green Dot MoneyPak features the following disclosure on its website, moneypak.com:  “Green Dot is not responsible for paying you back. Your MoneyPak is not a bank account. The funds are not insured against loss.”  MoneyPak suggests that its customers treat the money on the MoneyPak like cash—once the MoneyPak is lost, there is no way to trace and recover the money.  If Green Dot did not display the required disclosures clearly and conspicuously, then it may have violated the law.  If the required disclosures accompanied the card at the time you purchased it, then you will likely not be able to recover your money from Green Dot MoneyPak.  You may want to consult an attorney for legal advice. 

While this will not assist you in retrieving your money in this instance, you should take the following steps in the future when attempting to obtain a loan:

  • Don’t pay up front.  Legitimate offers of credit generally do not require an up-front fee. Any fees are taken from the amount borrowed after the loan is approved. 
  • Don’t fall for promises that you’ll get a loan regardless of your credit record.  If you have poor credit or haven’t established a good credit record yet, it’s unlikely that a reputable company will lend you money. 
  • Do business with licensed companies.  Ask Georgia’s Department of Banking and Financing (http://dbf.georgia.gov/general-information) if the lender operating in Georgia has complied with the licensing requirements.  If it has not, then you should not do business with that company.
  • If you can’t get a loan yourself, get a co-signer.  Having a co-signer may allow you to obtain a loan from a reputable lender when you would ordinarily not be able to.  A co-signer, usually a friend or relative, is someone willing to apply with you for a loan.  You and the co-signer would both be equally responsible for the loan payments. 
  • Get all the costs and other details before you decide.  Shop around for the best loan rates and fees.  Research several lenders, and look for consumers’ reviews of the different lenders.
  • Have proof of what you were promised.  Make sure to get the loan agreement in writing or in an electronic form that you can use to document the deal.  You want the deal in writing so you know the precise terms of the agreement and so the lender cannot change the terms after you enter into the loan agreement.

 

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