Our previous two posts dealt with the origins of the Foreclosure Rescue Scam and provided some characteristics to help homeowners recognize a scam from a safe distance. Even armed with good information, it’s sometimes hard to differentiate the good guys from the bad.
The scammer is well rehearsed at sounding smart, compassionate and sincere. At Keep Your Home California, we investigate these people fairly often and we seldom find conclusive evidence of their misdeeds. In this post, we will provide you with some practical steps that you can follow to review and identify these con artists. Warning: None of these techniques are foolproof and it’s very difficult to identify a scammer with any level of certainty.
It is our hope that by doing a little research, you might uncover enough “red flags” to steer you away from potential danger before you lose any money. Here are a few simple steps that you can take to perform a high-level review:
- Review correspondence from the potential Scammer. It’s likely that most of your contact with a scammer will be by email and telephone. The scammer typically doesn’t want to meet face-to-face. It’s unlikely they have an office and they might be located nowhere near you. Look at their email address. Is there a company or organization designation? Very often, scammers use public email services such as Hotmail, AOL or Gmail because they don’t work for a legitimate organization. A public email address is a red flag.
- Ask about and verify licenses. Sometimes the scammer claims to be an attorney or claims to have a real estate license. They may tell you not to contact your lender, lawyer or credit counselor. Ask for their license or bar number and then verify the license with the State Bar of California or the California Bureau of Real Estate. Even without a number, you can search by name.
- For an Attorney Search, go to http://members.calbar.ca.gov/fal/membersearch/quicksearch. Contact the attorney using the phone number listed in their profile, not the number given to you by the Scammer, to verify that the person listed is actually the person who contacted you.
- To verify a Real Estate License, go to http://www2.dre.ca.gov/PublicASP/pplinfo.asp. Independently locate a phone number, using the internet or other genuine phone directories, and contact the person to verify that the person listed is actually the person who contacted you.
- Evaluate their website … if they have one. The absence of a website is a major red flag. However, most scammers have a website. And, because they often have to change names to elude being caught, their websites are usually very sparse. A few pages without much real content and almost never the names, or photographs, of any employees, managers or executives. Their “Contact Us” page will usually be limited to an online contact form. No physical address, no phone numbers, no email addresses.
- Check their physical address. If you do happen to have what appears to be a physical address, put it into Google Maps and see what appears. Go to the “Street View” if it is available. You might see an office building or a private residence but, more often than not, you will see a shopping center and one of the tenants in that shopping center will be a UPS Store, or similar mailbox service. Red flag!
- Perform an Internet search. Use an effective search engine and look for the name of the company, of any individuals you can identify, and also search phone numbers that you have been given. If you poke around enough, you just might find useful information such as previous complaints.
- Requests for fees. Any request for fees or money before any services are performed, payments in cash, money order or “wire transfers” are all warning signs.
Please remember that you might be dealing with criminals and we aren’t advocating that you become a private investigator or vigilante. Do not, in the course of your review, misrepresent yourself or violate anyone’s rights or privacy. If your research indicates that you are likely dealing with a Scammer, do not confront them, simply disengage.
Image courtesy of Stuart Miles at FreeDigitalPhotos.net.
Losing a home to foreclosure is most often viewed, by those standing safely outside the transaction, as an economic event. And that is certainly true.
However, for those living under the threat of losing their home, the experience is much more personal.
The thought that one’s home might be involuntarily swept out from under them unleashes a flood of emotions that may include fear, anger, depression, shame and frustration. People in the foreclosure process seldom mention money or wealth creation or asset preservation. They speak instead in terms of not uprooting their kids, of loving their home, their neighborhood and their schools.
We have heard firsthand many of the voices of those standing on the brink of losing their home. Even when clouded by anger, their words are filled with fear and anguish and desperation.
As with any disaster that leaves in its wake hurting and desperate people, the foreclosure crisis gave rise to a class of ruthless predators seeking personal gain at the expense of those who can afford it least.
Foreclosure rescue scams were born as a growing number of Californians were fighting to save their homes while facing a complex and daunting foreclosure process. Legitimate sources of assistance, such as the Home Affordable Modification Program (HAMP) and Keep Your Home California (KYHC), also arose as viable options for homeowners, but often the false hope and empty promises of the scammers drown out the messages of these bona fide programs.
Over time, the scammers learned how to look and sound like real rescue programs. They frequently adopt names with elements of HAMP or KYHC embedded in them. To the untrained eye, their websites look legitimate, often using language and graphics taken directly from keepyourhomecalifornia.org.
The scammer sometimes tries to look like a government agency, sometimes like a law firm and sometimes they even have on their websites warnings about foreclosure rescue scams. Many of these con artists worked previously in the mortgage industry – so they speak the language. They look legitimate, say all the right things, and make promises that speak to the deepest fears of a homeowner in crisis.
The scammer leverages the emotions of hurting and scared people and then tries to strip them of what little resources they have remaining. In addition to having their money stolen, homeowners in the hands of a scammer lose valuable time and often go so deeply into the foreclosure process that any chance they had of saving their home, and any shred of remaining hope, is gone.
The scammer claims to have special powers over Loan Servicers and promises to fight for the homeowner, stop their foreclosure, and make all of the stress and turmoil disappear. To a beleaguered homeowner, weary from the fight, the scammer looks like an ally and a savior. But know this, these thieves have no influence, no power, and the only thing they want to relieve a homeowner of is their money.
In our next installment, we will discuss the keys to identifying a scam and what actions should be taken if you have been the victim of a foreclosure rescue scam.
Keep Your Home California turns five years old in February.
And like any 5-year-old, the free mortgage assistance program has changed, a lot.
When Keep Your Home California debuted, the state’s once-booming housing market had collapsed. Foreclosures dominated many communities, from Crescent City to Chula Vista. Home values plummeted statewide, in some cases by more than 50%.
Homeowners across the state were in need of financial help – and even an inkling of hope that they could remain in their homes. Fortunately, Keep Your Home California was – and still is – able to provide both, with up to $100,000 in mortgage payment assistance.
From the start, the four Keep Your Home California first mortgage programs were designed to help homeowners address hardships from different aspects of the foreclosure crisis. If you lost your job, the Unemployment Mortgage Assistance Program could make your payments for you while you looked for work. If you had severe negative equity, the Principal Reduction Program could reduce the outstanding principal balance you owed. And so on…
Officials with the state-managed program are constantly looking at ways to improve Keep Your Home California. As a result, there have been several changes along the way.
All of the changes were based on data and feedback program officials have collected from applicants over the years. If certain things weren’t working, they were changed or discontinued. If other things were working, they were expanded or remained in place.
Some of the most popular and often-used programs have been expanded over time.
One of the biggest changes was to triple the amount of time homeowners can receive help from the Unemployment Mortgage Assistance Program. Now, out-of-work homeowners can receive as much as $3,000 per month for up to 18 months or $54,000. When the program launched it was capped at six months and $18,000, but program officials soon realized that wasn’t enough due to the staggering amount of Californians who were “long-term unemployed.” Like all of the program changes, the decision to expand was made to better address the challenges homeowners were facing.
The changes to the Principal Reduction Program have been even more significant. Originally Keep Your Home California required a dollar-for-dollar match from mortgage servicers as part of the Principal Reduction Program. For example, Keep Your Home California and the mortgage servicer could each offer a maximum of $50,000 under the program, providing a total of $100,000 for homeowners in principal reduction.
But few servicers enrolled in the Principal Reduction Program, meaning homeowners were unable to get the assistance. So, Keep Your Home California changed the program, and now provides the entire amount—up to $100,000. More servicers signed up for the program, which has allowed many more homeowners to be approved for principal reductions.
Within the last year, officials also announced an effort to assist homeowners with unaffordable mortgages through the Principal Reduction Program. Up until that change, the program was only available to homeowners who had negative equity. This change gave yet another boost to the amount of homeowners who could qualify. In fact, Keep Your Home California approved a record number of homeowners through the Principal Reduction Program in 2015. In 2011, the first year of the program, only 166 homeowners were approved. About 2,800 homeowners were approved in 2015, 17 times the amount of homeowners in 2011.
Another significant program change occurred when Keep Your Home California increased the $25,000 limit to $54,000 for the Mortgage Reinstatement Assistance Program, allowing homeowners to catch-up on their past-due mortgage payments. The data analysis showed that a significant number of homeowners had arrearages exceeding the previous program cap of $25,000 and many of those arrearages increased as the homeowners attempted to work on a loan modification with their servicers. In light of this information, the cap was increased. As has always been the case with this program, homeowners must be able to make their mortgage payments going forward.
In early 2015, Keep Your Home California also introduced a new program to help senior homeowners with reverse mortgages. The Reverse Mortgage Assistance Pilot Program offers as much as $25,000 to help cash-strapped seniors dealing with past-due property-related expenses, such as property taxes and/or insurance.
In addition to program changes, the team at Keep Your Home California also has made changes to increase the availability of assistance, improve customer service, and connect with more homeowners (this blog is just one effort we’ve introduced since the program started).
Keep Your Home California launched with just 10 mortgage servicers – the companies that collect the monthly payments – enrolled in the program. Today, almost 250 servicers participate in the program, from big banks such as Bank of America and Wells Fargo to pint-sized credit unions. With more servicers participating, more homeowners can be considered for assistance.
There have been other changes over time, including a new interactive website featuring a 12-question “Eligibility Calculator” homeowners can take to better understand for which programs they may qualify. The team at Keep Your Home California has been working to keep the programs relevant for the changing landscape when it comes to foreclosure prevention in the state. As the data changes, so too does Keep Your Home California.
One thing that hasn’t changed is that Keep Your Home California’s far-reaching goal and never-ending focus has always been on helping homeowners. As long as there is funding available, the program will help low to moderate income homeowners who have experienced financial hardships prevent foreclosures.
Homeowners seeking more information about Keep Your Home California or any of its five programs should call 888-954-KEEP (5337) between 7 a.m. and 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays or visit www.KeepYourHomeCalifornia.org. Representatives can answer questions and take applications in virtually any language through a translation service and there is never a fee for any Keep Your Home California services. A Spanish-language version of the website is also available at www.ConservaTuCasaCalifornia.org.
Some California homeowners dealing with a cash crunch could be considering difficult but necessary options — perhaps foreclosure, a short sale or even selling their home with little or no equity afterwards.
But what happens when the deal closes or the homeowner walks away? Where will the homeowner and their family live?
It’s an important and often pricey question.
California homeowners that believe living mortgage-free means more money in their pocket, may want to reconsider. In many cases, former homeowners could actually pay more in monthly rent than their previous monthly mortgage payment, according to industry reports.
California rental rates have increased about 15% during the past year, and more in some areas of the state. In fact, the Golden State has six of the 18 most-expensive metropolitan areas in the nation for rent, including four in the top 10.
A two-bedroom apartment in San Francisco will cost about $4,650 per month — the highest rent in the nation and almost $1,000 more than second-place New York City, according to Zumper.
Los Angeles is the second most-expensive city for rent in California (and fifth nationwide) at $2,500, followed by San Jose (sixth in the U.S) at $2,308 for a two-bedroom home. Oakland finished as fourth most expensive at $2,270, followed by San Diego at $1,840, according to Zumper.
Earlier this year, the Economic Roundtable put out a report that found 13,000 people become homeless in Los Angeles County each month, due to the high cost of housing.
Even if you live in California’s midsize, inland cities, rent could cost a few hundred dollars more than a mortgage, according to Zillow. For example, the average rent for a three-bedroom home in Sacramento is $1,459, with Bakersfield and Redding at $1,374 and $1,311, respectively.
Sure, as a renter you don’t have to pay property tax and homeowner’s insurance, but you don’t have the tax benefits of homeownership, either. Keeping people as homeowners with an affordable mortgage payment is a better option than having them enter the high-cost rental market due to a financial hardship.
So, what if you could actually stay in your home?
Well, Keep Your Home California, the free mortgage-assistance program, has four distinct programs that could help. The federally funded, state-managed program has one primary goal: help homeowners stay in their homes.
For example, Keep Your Home California’s Mortgage Reinstatement Assistance Program allows homeowners to catch-up on their past-due payments, up to $54,000. Now, homeowners must be able to make the payments going forward, but this gives them a clean slate and the opportunity to remain in their home.
The Principal Reduction Program offers as much as $100,000, lowering their principal balance and often reducing the monthly mortgage payment by hundreds of dollars. The program is designed to help homeowners with unaffordable or underwater mortgages.
And the Unemployment Mortgage Assistance Program provides up to $3,000 per month for 18 months, or a total of $54,000, for out-of-work homeowners. Rather than worrying about the monthly mortgage payment, homeowners can focus on finding a job.
Of course, Keep Your Home California has some requirements, including the homeowner’s mortgage servicer, the company that collects the monthly payment, must participate in the program. More than 240 mortgage servicers are currently enrolled in the program, including Bank of America, Wells Fargo and Chase.
And homeowners must meet county-by-county income requirements, which range from about $70,000 in rural counties to more than $120,000 in some Bay Area counties. Additionally, homeowners must have suffered a financial hardship — such as a job loss, cut in pay, divorce or extraordinary medical expenses — in order to be eligible for the program. Severe negative equity, a loan-to-value ratio of 120% or more, is considered a financial hardship for the Principal Reduction Program.
If you would like more information or want to apply for Keep Your Home California, call 888-954-KEEP (5337) or visit www.KeepYourHomeCalifornia.org (Spanish speakers should visit http://conservatucasacalifornia.org/ ). The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Translators are available, so counseling sessions can be conducted in virtually any language.
Image courtesy of iosphere at FreeDigitalPhotos.net.
Free, state-run program has assisted more than 55,000 homeowners
When a big bank closed a local service center, Edith and dozens of other employees who owned homes were suddenly without work and wondered how to keep their homes.
Cash-strapped homeowner Carrie and her husband got behind on their mortgage payments when he lost his construction job.
Frank battled health issues and hefty medical expenses, and, to make matters worse, his longtime employer closed the plant where he worked. His one-time affordable mortgage was now an impossible-to-make payment.
Keep Your Home California—the state’s free mortgage-assistance program — has helped all three and more than 55,000 other financially struggling low- to moderate-income homeowners during the past four years.
Recent changes to multiple Keep Your Home California programs have made it easier than ever for homeowners to qualify for assistance. The program began helping homeowners in February 2011, after the state received almost $2 billion from the U.S. Treasury’s Hardest Hit Fund. To date, more than 55,000 households have received $1.1 billion in assistance. Hundreds of millions of dollars remain available to homeowners, who are encouraged to apply as soon as possible.
“This is truly changing our life, changing our future and rescuing my family and our home,” said Carrie, who was able to catch up on her mortgage payments thanks to Keep Your Home California. “Words can’t express our gratitude for what has been done for us. We feel like this is a fresh start for us.”
Much has changed with the economy in recent years, but there are many homeowners who continue to benefit from the program. About one of every 12 mortgages in the state are with homeowners who owe more than the value of their home, and 1.2 million Californians are still without work.
“Despite a better economy and job market, there are still many homeowners who are faced with numerous challenges, from catching up on their mortgage payments to finding work,” said Tia Boatman Patterson, Executive Director of the California Housing Finance Agency (CalHFA), which oversees the state-run program. “We’re just as committed today as in the first days of the program to helping California homeowners prevent avoidable foreclosures.”
Keep Your Home California has four programs to help homeowners who are experiencing struggles with their first mortgage:
- Principal Reduction Program: Homeowners who owe more than their home is worth and/or have an unaffordable monthly payment can receive as much as $100,000 to lower their principal balance – and reduce their monthly mortgage payments.
- Unemployment Mortgage Assistance Program: Out-of-work homeowners eligible for jobless benefits from the state Employment Development Department can receive as much as $3,000 per month in mortgage assistance for up to 18 months, or a total of $54,000.
- Mortgage Reinstatement Assistance Program: Homeowners who are behind two months or more on their payments could receive as much as $54,000 to help them “catch up” on their past-due mortgage payments. Homeowners must have recovered from their financial hardship and be able to make their mortgage payments going forward in order to be eligible for the program.
- Transition Assistance Program: Homeowners who have reached an agreement with their mortgage servicer for a deed-in-lieu of foreclosure or a short sale could receive up to $5,000 in relocation assistance.
Keep Your Home California also launched the Reverse Mortgage Assistance Pilot Program, which provides low and moderate income senior homeowners assistance to avoid foreclosure. Senior homeowners who are at risk of losing their home to foreclosure due to delinquent property expenses associated with their Federal Housing Administration-insured reverse mortgages could qualify for up to $25,000. The pilot program started in February 2015.
Regardless of the program used, a vast majority of homeowners are pleased with Keep Your Home California And 93 percent of homeowners still own their homes two years after receiving assistance from the program.
“My house was underwater, I just couldn’t make it,” said Frank, who battled cancer, health care bills and a handful of mortgage servicers in an effort to refinance his mortgage “I got behind on all of my bills. I had to choose every month what bills to pay. I tried to refinance, but they weren’t willing to restructure the loan.”
Then, he qualified for assistance from the Keep Your Home California Principal Reduction Program, knocking off almost $50,000 from his outstanding balance and saving him $300 per month.
In order to qualify, homeowners must meet program eligibility requirements, including having suffered a financial hardship – such as a job loss, cut in pay, a divorce, a death in the family or extraordinary medical expenses – and meet county-by-county income requirements.
A homeowner’s mortgage servicer, the company that collects the monthly payment, must participate in the program. About 240 mortgage servicers, including Bank of America, Wells Fargo and Chase, are enrolled in Keep Your Home California.
“I was so happy, I cried,” says Edith, who was able to attend school for several months while the Unemployment Mortgage Assistance Program paid her monthly mortgage. The single mother recently completed a degree program and has found a county government position in Northern California. Keep Your Home California has “made my life easier, better.”
And there are many other homeowners who could benefit from the program.
Homeowners are encouraged to visit www.KeepYourHomeCalifornia.org for more information on the programs or call 888-954-KEEP (5337) to speak with a representative. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Translators are available at no cost in virtually any language.
Keep Your Home California is often on the road, attending events and helping homeowners with their mortgage issues, from Lake County in Northern California to the desert communities of Southern California.
It’s an effort to connect with, educate and encourage homeowners about the free mortgage-assistance program, which has helped more than 55,000 people since February 2011—or the equivalent of about half of the people in Richmond, Temecula or Ventura.
So far, Keep Your Home California representatives have attended 93 events since the beginning of 2015, or more than 12 per month. In fact, the state program has participated in 778 events since early 2011—more events than baseball games played by any one of the Golden State’s Major League Baseball teams over the same period.
The free events allow counselors and program representatives to meet face-to-face with homeowners and answer questions about Keep Your Home California, and even help with the application process. The Keep Your Home California website offers an up-to-date calendar of events for homeowners.
Keep Your Home California often partners on these free events with mortgage servicers that participate in the program—including Bank of America and Wells Fargo— and the dozens of housing counseling agencies statewide that meet one-on-one with homeowners.
The collaborative effort benefits the housing counselors, the mortgage servicers, Keep Your Home California, and most importantly, financially strapped homeowners interested in the program.
Thousands of homeowners have been exposed to the state-managed program at these events during the past four-plus years. From couples who are casualties of corporate cost-cutting to families faced with hard-to-make mortgage payments, Keep Your Home California has a program ready to help:
- Principal Reduction Program: Homeowners who owe more than their home is worth and/or have an unaffordable payment can cut their mortgage principal as much as $100,000 while saving hundreds of dollars every month. Homeowners approved for the program enjoyed an average savings of $216 per month, from $1,316 to $1,100 during first-quarter 2015, the latest figures available.
- Unemployment Mortgage Assistance Program: Out-of-work homeowners who have received jobless benefits from the state Employment Development Department in the previous 30 days can receive as much as $3,000 per month for up to 18 months for their mortgage payments.
- Mortgage Reinstatement Assistance Program: Homeowners who are behind two months or more on their payments can qualify for as much as $54,000 to help them “catch up” on their past-due mortgage payments. Homeowners must have recovered from their financial hardship and be able to make their mortgage payments going forward in order to be eligible for the program.
- Transition Assistance Program: Homeowners who have reached an agreement for a deed-in-lieu of foreclosure or short sale with their mortgage servicer could receive up to $5,000 in relocation assistance.
- Reverse Mortgage Assistance Pilot Program: Homeowners 62 years or older who are at risk of losing their home to foreclosure due to delinquent property expenses associated with their Federal Housing Administration (FHA)-insured reverse mortgages can qualify for as much as $25,000 in assistance. The program reinstates past-due property-related expenses such as taxes and homeowner’s insurance, and provides up to 12 months of additional assistance to ensure homeowners get back on their feet.
If you would like more information about Keep Your Home California and the five programs, attend an upcoming event or call the counseling center at 888-954-KEEP (5337) or visit www.KeepYourHomeCalifornia.org (Spanish speakers should visit http://conservatucasacalifornia.org/). The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Translators are available, so counseling sessions can be conducted in virtually any language.
Affordable mortgage payments are a big-time concern for many homeowners in California, especially for families whose income has declined in recent years.
Keep Your Home California – the free mortgage assistance program — recently changed its Principal Reduction Program in order to help more low- and moderate-income homeowners struggling with their mortgage payments. Homeowners who have an unaffordable first mortgage payment may qualify for up to $100,000 in assistance.
The state-run program’s goal is to help homeowners attain an affordable mortgage payment, before they fall behind on their payments.
Keep Your Home California will assist homeowners who have suffered a financial hardship – such as a loss of income, divorce, death or extraordinary medical bills — and help solve their mortgage troubles.
The change allows homeowners with a hardship and unaffordable monthly mortgage payments — greater than 38% of the homeowner’s household gross income — to qualify for assistance to reduce their principal balance. The principal reductions will often lead to savings of hundreds of dollars each month on homeowners’ mortgage payments.
It’s a big change for the program, which previously required homeowners to owe more on their mortgage than the value of their home, often referred to as negative equity or an underwater mortgage. Now, homeowners with unaffordable payments can apply and be approved for as much as $100,000 in assistance from Keep Your Home California, even if they have positive equity in their home.
“Despite an improving economy and job market, there are still many homeowners who are struggling every month …” California Housing Finance Agency Executive Director Tia Boatman Patterson said in a recent news release about the changes to the Principal Reduction Program. “Our goal is to help California homeowners prevent avoidable foreclosures.”
CalHFA oversees Keep Your Home California, a federally funded program.
Homeowners approved for the Principal Reduction Program must be able to make their monthly mortgage payments going forward.
Homeowners must also meet program eligibility requirements, including having suffered a financial hardship and county-by-county income requirements (a complete income limit list is available at http://keepyourhomecalifornia.org/income-limits/). Severe negative equity – a loan-to-value ratio of 120% or more – is considered a financial hardship under the Principal Reduction Program.
If you would like more information or want to apply for Keep Your Home California, call 888-954-KEEP (5337) or visit www.KeepYourHomeCalifornia.org (Spanish speakers should visit http://conservatucasacalifornia.org/). The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Translators are available, so counseling sessions can be conducted in virtually any language.