Scammers Set Sights on Desperate Homeowners

Calif. AG: Be 'deeply skeptical' of offers to help refinance
By Matt Cantor,  Newser Staff
Posted Mar 16, 2009 2:00 PM CDT
Scammers Set Sights on Desperate Homeowners
Edith Adachi of Chicago, center, who lost her home to foreclosure six months ago, gets a hug from Loretta Lucas of New York during a rally on March 10, 2009, on Capitol Hill.   (AP Photo/Lauren Victoria Burke)

A record 5.4 million homeowners across the country are behind on their mortgages, and scam artists are looking to cash in, the San Francisco Chronicle reports. Ads offering help lowering mortgage payments are everywhere. But these "loan negotiators" usually provide services that homeowners can handle on their own, for free—things like contacting lenders, writing letters, and sorting out financial records.

“People are in such a desperate place that it's low-hanging fruit,” an attorney said. California’s AG urged people to be “deeply skeptical” of any company seeking payment up front. Sometimes, such practices aren’t illegal, but "they're taking advantage of uninformed consumers to get money out of their ignorance," another lawyer said. Last week in California, two “negotiators” went to jail for up to six years for grand theft.
(Read more housing market stories.)

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