Five Tips for Avoiding Foreclosure Scams

April 1, 2009

The Federal Reserve just came out with an ad for a section of their website, “Five Tips for Avoiding Foreclosure Scams.”  The ad urges people who may be facing foreclosure to check out this section of to get trusted information on how to avoid foreclosure scams.

If you or someone you know is facing foreclosure, be sure to take a look at the Fed’s site–you should only work with HUD-certified counselors, and you shouldn’t have to pay a lot of money to get help. 


A Community-Wide Effort

December 4, 2008

As a way to illustrate the community-wide effort that has taken place with Facing the Mortgage Crisis we have created the following 3-minute video. We have been working with 26 community partners in order to connect people to resources and raise awareness of the impact of the mortgage crisis on the St. Louis region. At the end of the day this effort is not about us or our partners; it’s about strengthening the St. Louis community.

Take a look at the video below.

New From the St. Louis Beacon – Anatomy of a foreclosure (part 1)

September 24, 2008
September 24, 2008

Anatomy of a foreclosure: For Sale – A house full of memories (Part 1)     
By Mary Delach Leonard, St. Louis Beacon staff    

Part 1 of 3
The collapse of some of the nation’s oldest financial institutions started on Main Street America with hundreds and thousands of homeowners such as 56-year-old Maureen McKenzie of Kirkwood who in May lost to foreclosure the small ranch house that had been in her family since it was built after World War II. How could this happen? The answer is … complicated. Over the next three days,
the Beacon will unravel the story of how Maureen McKenzie of Kirkwood, Mo., lost her 900 square feet of the American Dream.

Two months after she lost her 900-square-foot, three-bedroom ranch to foreclosure, Maureen McKenzie of Kirkwood swallowed her nerves and stood before a live studio audience at KETC-Channel 9 to address a panel of housing counselors:

“I’m Maureen. And I’m from Kirkwood. And I recently lost my house to foreclosure. And my house is still sitting empty, and I am wondering if there’s any help available to try and get my house back.”

McKenzie, 56, was on a self-imposed mission as she spoke those words during the July 15 segment of “Facing The Mortgage Crisis,” which was broadcast live throughout the St. Louis area.

Read the rest of this entry »

Top 3 mortgage scams and how to protect yourself

August 21, 2008
August 21, 2008

This article from MSN real estate is a good place to start finding out about the different mortgage scams going on. Here are some key points I took away from it:

The top 3 mortgage scams

1. Equity stripping/bailout– In this situation, the scammer buys someone’s house from them before it is foreclosed upon. They offer to rent the house to the person until they can afford to buy it back, which leads to the homeowner signing the deed over to the scammer, who has no intention of selling the house back–instead they make it impossible for the homeowner to keep up with rent, evict them, sell it off and pocket the profits.

What you can do:

 Be suspicious of anyone promising to “save your credit” or buy your home “as is”. If it sounds too good to be true, it likely is.

-Don’t modify or sign away the deed to your home without consulting a lawyer you trust.

-If selling your home, be sure that you are released from all liability for your mortgage. Know your rights specific to your state.

2. Phantom Help-A homeowner falls behind on their mortgage and is facing foreclosure. A person or company offers to help save the home, and the homeowner pays them up front for their “services”, which are little more than making phone calls and filling out forms the person really could have handled themselves. Homeowners pay a lot up front for “big results”, but before they know it (especially in Missouri), they’re out thousands of dollars and the home is lost.

What you can do:

-Call your lender immediately and discuss the situation with the loss mitigation department.

-Find a FREE housing counselor from one of the many resources listed on KETC’s site. You should NEVER pay someone for foreclosure help.

-Be suspicious of door-to-door advertising, flyers and of terms like “foreclosure service” or “mortgage consultant”. These services usually come with a price tag and a big loss.

3. Bait and switch-In this type of scam, the homeowner is tricked into signing over the deed to their house without even realizing it. Scammers pretend to be housing counselors or real estate brokers. They act the part and have very official looking documents for the homeowner to sign and initial to save their home. However, those official documents, written in a language that might confuse even the savviest homeowner, actually turn the house over to a 3rd party. Even if a person doesn’t sign the document giving the home away, scammers are known to successfully forge the person’s signature.

What you can do:

-Read everything carefully with a trusted lawyer present.

-Don’t sign anything with blank spaces. The scammer could add information in later.

-Get everything in writing. Don’t make verbal agreements.

-Do not get pressured into signing anything.

-Again, if it seems too good to be true, it likely is.

An important thing to remember is that anyone can be victimized. We’ve all been scammed at some point in our lives and it’s embarrassing because, in hindsight, you should have known better. For me, it was the time I gave $40 to a stranger because he had me convinced he lived across the street from me and needed money for a locksmith. He even knew which apartment I lived in (scary) and said he’d slip the money back through my mail slot. Of course you know how that story ends. Am I that stupid? No. Am I that trusting? When someone is that convincing (down to knowing the names of my neighbors), yes. 

These mortgage scam victims aren’t getting into trouble because they don’t know any better. Con-artists make a living by getting people to trust them, and in a desparate situation it’s easy to trust someone who looks like they have a clue.

Whatever the circumstances, if you’ve been scammed it’s important that you talk to someone about it. Call your bank, your lender, or a HUD-certified housing counselor. Not only could you help your own situation, you could educate someone else before it’s too late for them.

You can find even more information on this page of tips to avoid becoming a victim of mortgage fraud, recently published by the FBI.

Watch KETC’s videos about mortgage scams:

Beyond Housing goes beyond lenders and servicers to find solutions

August 15, 2008
August 15, 2008

I took a lot away from this morning’s appointment with Linda Ingram at Beyond Housing. They too are a nonprofit in St. Louis that offers free housing counseling and a variety of other resources for homeowners.

The more I meet with people, the more I’m learning what I should be asking that I may not have known to touch on before, and it’s a real resource to go from place to place because I feel like I’m having one continuous conversation about the mortgage crisis. This was especially beneficial today.

One thing that didn’t sit well with me was hearing from a housing counselor that lenders don’t always want to work out a plan with the homeowner. Maybe it was naive on my part to believe it could be that easy to just call and work it out. In any case, I’ve tried in these profiles to stress the importance of seeking help, and it worried me to the point of losing sleep last night that maybe it’s not as effective as it seems. The good news is I was wrong.

Linda Ingram told me that, like Catholic Charities, they too have ways of working with stubborn lenders. She and her housing staff find it effective to go beyond communicating with lenders and servicers. When the lender won’t work something out, they contact the lender’s attorney.  

For borrowers with a foreclosure sale date, it can be as simple as calling the attorney and saying “I want to save my house. Can you help?” Ingram also emphasizes that, if a homeowner tries to fight the foreclosure on their own, communicate with the loss mitigation department, not collections.

Ingram also urges everyone to get involved in their homeowner education program. The three week program includes classes in financial literacy, Q&A’s with area lenders, how to perform basic home repairs, and other “must know” details about home buying and ownership. “It’s well worth the time and can keep you out of a lot of future trouble,” she says.

For those attending housing counseling sessions, they can expect to put together a “workout packet”. Pay stubs, tax returns and expenses are put together with a letter explaining why the homeowner has fallen behind and what they are doing (or plan to do) to fix it. This is submitted to the mortgage company with the intention of postponing the foreclosure sale. 

After the first counseling session, Beyond Housing sends the homeowner a summary of what they discussed and an action plan for the homeowner to follow. The goal is to work out a 5 year plan in which the client comes out with better credit and a managable lifestyle. “Any client here is a client for life,” says Ingram. “Once a person receives counseling, they can call or come by with any concern they might have.”

Ingram’s last word of caution is to be wary of scam artists trying to profit off your housing troubles. “Everyone in the world will send you letters or call about some refinancing offer or way to stop foreclosure,” she says. Some of her clients have been tricked into paying $1400+ to “work out a foreclosure solution” only to be told they needed to pay even more to find out what that solution was. The safest route someone can take is to see a nonprofit agency whose highly trained counselors offer their expertise for free.

To set up an appointment with Linda or one of Beyond Housing’s counselors, call (314) 533-0600. You can learn even more about what Beyond Housing offers by visiting their Web site:

Short video of Linda Ingram describing what homeowners should bring with them to a counseling session:

Catholic Charities: “Nothing is worse than doing nothing.”

August 14, 2008
August 14, 2008

Today’s visit was to the offices of Catholic Charities at 800 North Tucker to meet with Karen Wallensak, director of Catholic Charities’ Housing Resource Center. She was a panelist on our July 22nd Facing the Mortgage Crisis live show. Here’s a picture of her taken during the broadcast, and you can even see me working away on the laptop:

Karen Wallensack of Catholic Charities addresses frequently asked mortgage questions while KETC's Angela Smith answers viewer emails.

Karen Wallensak of Catholic Charities addresses frequently asked mortgage questions while KETC's Angela Smith answers viewer emails

I wanted to find out about Catholic Charities’ services, but after my meeting last week at Urban League I also hoped to understand more about foreclosure counseling and how negotiating with a lender works.

A little background: Catholic Charities boasts a housing resource staff of 34. Ten are nationally certified HUD housing counselors who serve as advocates, counselors and mentors for homeowners, while the other 24 specialize in areas like finding affordable places for people to live.

Their foreclosure counseling process is similar to Urban League’s in that it’s free and open to people in all stages of the mortgage crisis. And no, you don’t have to be Catholic to qualify for help (I always assumed you had to be).

Wallensak’s first bit of advice to homeowners facing foreclosure is that “nothing is worse than doing nothing.” The longer the homeowner waits to contact the lender, the more the lender assumes there’s no interest in working something out and it can become more difficult to make arrangements. Though the bank loses an average of $50,000 on each foreclosed home, that won’t stop them from taking it to satisfy the debts they owe their own investors.

So how willing are lenders to work with the borrower? “The hard truth is that lenders want to be repaid, and changing terms of a home loan’s not at the top of their list right now,” says Wallensak. But with a housing counselor, there’s a better chance of getting around these road blocks.

 If Catholic Charities can’t work out a permanent loan modification, they try to get interest rates lowered or frozen temporarily. “If a lender wants to freeze rates for six months, that doesn’t give the homeowner a lot of time to get back on their feet,” says Wallensak. “But in cases where they’ll freeze for years at a time, that’s long enough to restore credit, save money and build equity in the home.”

For Wallensak, the best way to work out a long term solution is to be realistic. If money’s not as good as it was in the past or some crisis has surfaced since buying the house, lifestyle changes must be made. Make a crisis budget. Negotiate as many other debts as possible. Communicate even if it isn’t always pleasant.

“Sometimes there’s no choice but to accept foreclosure if the situation can’t improve,” she admits. Catholic Charities offers many services for those unable to save their homes including help with moving expenses, relocation assistance and mental health counseling. Wallensak and her staff provide resources for up to a year after families relocate, and have seen many of their clients rebuild their lives with great success.

If she could tell homeowners any one thing, it would be that losing a house is devastating, but you do survive. Life does go on. “Remember not to become so emotionally invested in your house that you can’t make the best decisions for your family.”

To make an appointment with Catholic Charities’ Housing Resource Center, call (314) 241-5600 x7129 or read more about them on the Web at

United Way 2-1-1 Helpline – Living St. Louis Video

August 5, 2008
August 5, 2008

Living St. Louis Producer Anne-Marie Berger visits the United Way’s 2-1-1 information and referral helpline. Designed to provide help to people looking for access to resources on topics such as food pantry referrals, utility bill questions, employment assistance and mortgage problems, the call center is staffed by trained operators who refer calls to the resources available closest to where the caller lives. The call center is also available by calling 1-800-427-4626.