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L.A. warned of loan modification scams

October 26, 2009 12:36:00 AM PDT
Los Angeles city leaders are getting tough when it comes to loan modification scams, launching a campaign to make homeowners more aware of the dangers.Mortgage modification scams are at an all-time high, which isn't surprising since in Southern California, foreclosures are setting records.

Officials are warning homeowners of paying for mortgage modifications that you could get for free.

Los Angeles Mayor Antonio Villaraigosa recently signed a first-of-its-kind ordinance to protect people against loan modification scams, and on Monday, he joined people launching a nationwide campaign to alert people on how to recognize the scams, fight them and try to save their homes.

"We want to warn Angelenos about these predators, about individuals and organizations whose only interest is to make a buck off the misery of innocent residents," Villaraigosa said.

Doris Tinson, a 74-year-old loan scam victim, said she paid a scam artist about $2,000 for help with her foreclosure, not realizing she could get help for free.

"Nothing was done," she said.

Tinson is still in her home, but she's still fighting foreclosure.

In Los Angeles alone, there have been 28,000 foreclosures in 2.5 years.

"Loan modification scams are reaching epidemic proportions across the nation. We cannot wait to wait any longer to take action or to let another homeowner fall into a deceptive trap," said Eileen Fitzgerald from Neighborworks America.

"Don't hand over money in advance to any person or company," added Fitzgerald.

Fitzgerald advised homeowners not to send mortgage payments to somebody other than the mortgage lender, and warned again listening to anybody who makes a guarantee.

"Not even legitimate debt counselors can guarantee to stop the foreclosure process," she said.

For information and reporting, the public can call (888) 995-HOPE.


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