As the foreclosure rate escalates, scam artists are trying to take advantage of vulnerable consumers

Contact:  Jason Moon (517) 335-1700
FOR IMMEDIATE RELEASE
February 27, 2008

LANSING – Today the Office of Financial and Insurance Services (OFIS) warned Michigan citizens who are behind on their mortgage payments and facing a foreclosure to be on the lookout for foreclosure rescue scams. Foreclosure rescue scams often begin with a scam artist making an unsolicited offer to pay a homeowner’s past due mortgage payments and “rescue” them from foreclosure. The scam artist will have the homeowner sign over the deed to the house and promise them that they can stay in their house as a renter with the opportunity to buy back their home when their finances improve.

Scam artists will then obtain a new mortgage on the house at a higher value than the old loan and keep the difference between the new loan and the old loan. The scam artist has now stolen the homeowner’s equity in the property. Scammers will often walk away from the situation, stop paying the new mortgage and pocket all of the equity. The home will again go into foreclosure and the former homeowner, who is now the renter, will be forced to leave the property and has now permanently lost their house.

“With the foreclosure rate escalating across the country, scam artists are trying to take advantage of vulnerable consumers,” said OFIS Commissioner Ken Ross. “Michigan homeowners who may be facing a foreclosure should avoid any unsolicited offer to save their home through the mail, a newspaper or a telephone call and they should never sign a legal document that has any misleading statements or one that they do not fully understand. These bottom feeders are taking advantage of hard times and should be avoided at all cost.”

If Michigan homeowners believe they may have uncovered a foreclosure rescue scam, please contact OFIS toll-free at (877) 999-6442 or online at www.michigan.gov/ofis

The Michigan House Appropriation Committee is considering a supplemental appropriation of $1.4 million funded by regulatory fees that would allow OFIS to hire an additional 34 mortgage industry regulators. OFIS strongly supports this legislation that would give the agency additional mortgage regulators that will help prevent illegal activity in the mortgage industry.

If a homeowner is facing a possible foreclosure and would like professional advice on their situation they can contact one of the U.S. Department of Housing and Urban Development’s (HUD) approved housing counselors. For a list of HUD approved housing counselors in Michigan visit: www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=MI

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