Mortgage-foreclosure scams on the rise
Share with others:
The last thing homeowners need while trying to save their houses from mortgage foreclosure is someone who says he can help but actually is a crook who wants to help himself.
Some homeowners, desperate to save the family homestead, have fallen for scams that have robbed them of money they can ill afford to lose.
And that's a problem for them, their mortgage companies and the federal government.
"Reports of mortgage-foreclosure scams are on the rise," said Anne M. DiTeodoro, communications coordinator for the Federal Reserve Bank of Cleveland, which includes counties in Western Pennsylvania.
"Knowing what to watch for and where to turn for help is vital for families who are struggling to stay in their homes," she said. "It's important for consumers to know that housing counselors and other resources are available at no or low cost to assist homeowners who have fallen behind on their mortgage payments."
Ms. DiTeodoro said avoiding foreclosure cannot be guaranteed -- regardless of the circumstances. "Working with a legitimate counselor can increase the chances of keeping a home, but consumers should be wary of people who tell them it's a sure thing."
Before listing some tips that the Federal Reserve Board has issued in an effort to protect consumers, here's some information on mortgage foreclosures in Allegheny County and Pittsburgh for 2008 and 2007.
There were 4,719 foreclosures in the county last year, including 1,255 in the city, according to a report compiled by Lisa Nelson, a senior policy analyst with the bank's Community Development Department. It said there were 4,706 foreclosures in the county in 2007, including 1,361 in Pittsburgh.
"While it appears that foreclosures have not cut as devastating a path through this county as through some others in the district, the problem nevertheless has impacted the region," Ms. Nelson wrote.
She said Penn Hills, with 338, had the dubious distinction of having the most foreclosures in the county last year. The community had 327 foreclosures in 2007. McKeesport was second with 120 foreclosures last year and 148 in 2007.
Brookline, with 81, had the most foreclosures in the city last year. Sheraden was second with 74. Sheraden led the city in 2007 with 69 foreclosures. Perry South was close behind with 67 foreclosures in 2007.
The report shows foreclosure filings in the county have quadrupled from a little more than 1,100 in 1995 to 4,706 in 2007. A map included in the report shows high rates of foreclosure in 2007 in Braddock, Clairton, Duquesne and Turtle Creek and the city neighborhoods of Allentown and Knoxville, but doesn't provide specific numbers.
It said the rates of foreclosure filings in the county are "positively correlated" with the following variables:
"The percent of high-cost loans; the percent of loans originated by subprime lenders; the percent of loans made by non-depository institutions such as finance companies, brokerage firms and mortgage finance companies; the percent of the population that is unemployed; the percent of the population without a high school degree; and the percent of the population that is African-American.
She said her analysis was based on foreclosure filings in the Allegheny County prothonotary's office, from mortgage-characteristic data gathered under the provisions of the federal Home Mortgage Disclosure Act and from U.S. Census Bureau demographic data.
Ms. DiTeodoro said the Federal Reserve Board has issued the following tips to help protect consumers from becoming victims of foreclosure avoidance scams:
• "Work only with a nonprofit counselor approved by the U.S. Department of Housing and Urban Development. For a list of certified counselors, go to www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm or call toll-free 1-877-483-1515.
• "Don't pay an arm and a leg" for advice on how to save your home from foreclosure. "Most housing counselors provide no- or low-cost counseling services."
• "Be wary of 'guarantees.' No one can ensure you good results."
• "Know what you are signing." Don't let a counselor pressure you into signing paperwork you haven't had a chance to read thoroughly or that you don't understand.
• "If it sounds too good to be true," it probably isn't true.
For more information about scams, especially those that target the elderly, see Post-Gazette staff writer Mike Fuoco's excellent story in last Sunday's paper or go to www.post-gazette.com.
Debunking urban myths
"Can you believe this!" "Did you see this!?" and "This is outrageous" often are the words in the subject line of e-mails sent by well-meaning -- or so we hope -- family, friends and co-workers.
All too often the contents of the e-mails are just another urban myth.
Casey Stengel had the best advice for those who distribute such e-mails:
"You could look it up."
But they don't.
So help them (and yourself) by referring them to www.snopes.com, a Web site run by Barbara and David Mikkelson, of suburban Los Angeles. An article by David Hochman in the April issue of Reader's Digest describes the site as:
"The Internet's pre-eminent resource for verifying and debunking rumors, ridiculous claims and those e-mails your sister-in-law can't stop forwarding.
"Whether it's an urban legend like [one of many Bill Gates stories], an overblown warning about the latest computer virus or that bizarre photo of 'Hercules, the world's biggest dog,' chances are Snopes.com [a name David Mikkelson borrowed from a family in a William Faulkner novel] has checked it out and rated it as 'true,' 'false' or 'undetermined.' "
Mr. Hochman said Quantcast, which tracks Internet traffic, said 6.2 million people visit Snopes.com each month., and that the New York Times recently put the Web site "on its short list of essentials that every computer user must know about."
If you want to look it up, you can do so at www.rd.com or by turning to page 98 in the magazine.
First Published March 26, 2009 12:00 am
