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Consumer alert: Scams promise to stop foreclosures

Consumers in Michigan who are in financial turmoil often seek help in matters of debt relief. There are a multitude of options from which to choose, and advertisements for financial services can be found online, through telemarketing and in print advertising. It can be easy to become confused about which choice is best, and even easier to be unsure exactly who is on the other side of such offers. Sadly, in many cases, offers to stop foreclosures or eliminate all debt are little more than scams.

An example lies in the story of one couple who sought out assistance with renegotiating their existing mortgage. They turned to a debt-adjustment firm in the hopes that the company could help them renegotiate their loan held by Wells Fargo. After paying $2,750 to the firm, the couple became troubled when a year passed and no progress had been made.

The firm employed a common tactic among scam artists; they asked the couple to refrain from contacting Wells Fargo directly, and insisted that the couple stop making their mortgage payments while the process was underway. In reality, the firm had failed to send any information to Wells Fargo, resulting in the couple's application for renegotiation being withdrawn. In this case, Wells Fargo was willing to work with the couple to get their loan back on track.

For many Michigan consumers, the story does not have such a happy ending. Falling prey to a scam that claims the ability to stop foreclosures can leave a homeowner out thousands of dollars and no closer to solving their mortgage woes. Federal regulators are working on the problem, but for the time being, consumers are left on their own to navigate through the various debt relief offers that are found online and elsewhere.

Source: Burlington County Times, "Beware of scams promising financial, mortgage assistance," Peg Quann and Rose Krebs, March 25, 2013

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