State tries to stymie mortgage scammers

For scammers, hard times are just a new business opportunity. That’s why we’re seeing so many scams these days aimed at people in danger of losing their homes.

The latest involve companies offering to rescue people from foreclosure or to help them modify their loans. They charge thousands of dollars — up front — and typically offer little or no help.

The Federal Trade Commission and attorneys general around the nation, including in Washington state, attempted to do something about the problem last week. Rob McKenna, the attorney general in our state, announced that he’s filed lawsuits against five companies accused of ripping people off, and notified 138 businesses providing foreclosure help and mortgage-related services of the applicable state laws.

“Housing crisis 2.0 has launched an attack on financially strapped homeowners,” McKenna said in a news release. “With so many borrowers looking for an opportunity to refinance or modify their loan terms, it’s not surprising that we’ve seen a new crop of deceptive business practices and operators looking to make an easy buck.”

McKenna noted that the state has seen a spike in complaints from people.

He cited a woman in Brier who had written his office about her experience with a California company called Mason Capital Group: “I contacted this company for a loan modification …They have lied … many broken promises … taken my $2,300. I had to file Chapter 13 to hopefully keep from losing my home. Because of this company my home went into foreclosure.”

Mason, which McKenna said is not licensed to do business in Washington state, was sued by his office in Snohomish County Superior Court.

“We alleged that Mason Capital Group charges homeowners $2,000 to $3,000 up front, then does little or nothing to actually save a home,” Assistant Attorney General Jim Sugarman said. “To add insult to injury, the services the company purports to provide are widely available for free or a low cost from properly licensed nonprofit and government housing counselors.”

The point that Sugarman makes is worth repeating, because it’s a frequent tactic used by crooks in all types of scams. What they offer for a lot of money is often available for free from the government or by a nonprofit group that has your best interests at heart.

If you are in financial trouble with your mortgage, don’t go to one of these companies that McKenna refers to as bottom feeders. Here’s what you should do:

  • Contact your lender. The company may be able to provide temporary help until you can refinance your mortgage with better terms.

    Find a housing counselor. Visit www.homeownership.wa.gov or call 877-894-466s for a list of counselors.

    Check out licensing of a loan modication business. If you choose a private business for help, check them out to ensure they are licensed as a loan originator, mortgage broker or consumer loan company. Go to the state Department of Financial Institutions at www.dfi.wa.gov or call 877-746-4334.

    See a lawyer. Homeowners facing foreclosure who need legal help and can’t pay should contact the Home Foreclosure Legal Aid Project at 877-894-4663.

    Mike Benbow: 425-339-3459 or benbow@heraldnet.com.

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