mortgage

Help for mortgage scam victims

Better Business Bureau can resolve disputes

Homeowners are well-advised to contact a local Better Business Bureau, or BBB, office for assistance as well, because these private organizations have a 70 percent success rate in business-to-consumer dispute resolution, according to the BBB's Web site. The BBB doesn't have legal enforcement authority, but will forward a complaint to the company and attempt to achieve a resolution, according to Alison Southwick, a spokeswoman at the Council of Better Business Bureaus in Arlington, Va.

"We are not a regulatory agency, so we can't force the company to pay you back, but we have been successful in resolving complaints against these types of companies for people and getting at least some of their money back," she says.

Unresolved complaints are reflected in the BBB's "reliability" report about the company. That creates an incentive for companies to cooperate even if they aren't BBB members because a poor grade can "serve as a warning to other consumers who are thinking about doing business with that company," she says.

The easiest way to file a complaint is to locate the local BBB through the national council's Web site and then use the online complaint form on the local BBB's Web site. Complaints may also be filed by calling the local BBB office.

Housing counselor can still help

Perhaps the most important advice for homeowners who have been victimized by a loan modification or foreclosure-rescue scam is that they can still benefit from a consultation with a nonprofit housing counselor that has been approved by the U.S. Department of Housing and Urban Development, or HUD.

The sad truth is that many homeowners would not have been able to afford their mortgage payment or avoided foreclosure even if they had not been the victims of a scam. A housing counselor cannot undo that reality or resolve disputes that involve contractual issues; however, a housing counselor can help homeowners figure out how much they can afford to spend on housing, according to Catherine Williams, vice president of financial literacy at Money Management International in Chicago.

"We will also take a look at the other debt, credit card debt, medical debt: Is there enough leeway with those debts to get those monthly payments down to free up additional dollars for housing?" she says.

A housing counselor can assist the homeowner in preparing an effective complaint to file with the government agencies and BBB and refer the homeowner to other local resources in the community. A counselor can also help the homeowner make the painful decision to "move on, rent an apartment, rebuild and perhaps come back into the housing market at another time," Williams says.

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