DOB: Governor Rell Warns Consumers of Foreclosure Rescue Scams

{news} NEWS RELEASE


Governor Rell Warns Consumers of Foreclosure Rescue Scams

This news release was issued by the Governor's Office.

March 6, 2008

With a report today announcing that home foreclosures across the nation soared to an all-time high in the final quarter of last year, Governor M. Jodi Rell offered advice to help homeowners avoid becoming the targets of foreclosure rescue scams.

“The first thing you should do if you are having trouble paying your mortgage is to call your lender,” Governor Rell said.  “Don’t be fooled by companies that offer to work with your lender on your behalf.  These companies do not offer to do anything that you cannot do yourself – and they charge for their services. 

“These so-called ‘foreclosure prevention specialists’ usually charge hefty fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for himself.  To make matters worse, none of the actions result in saving the home.”

The Governor initiated several programs in response to the sub-prime mortgage situation.  The Mortgage Foreclosure Assistance Hotline has been in effect since August, and has handled more than 2,450 calls to date.  Connecticut’s residents who are facing foreclosure on their homes may call (877) 472-8313 toll-free and receive advice and guidance regarding their mortgage problems.  

The free hotline is open Monday-Friday, 8:00 a.m. to 5:00 p.m. 

“We are committed to helping our citizens who are facing foreclosure in finding a proper solution to their problem,” Governor Rell said.  “We want to do all we can to help people avoid foreclosure, and the hotline provides people with information, materials, and contacts to help resolve their mortgage difficulties.  We want homeowners to know that this free information and assistance is available to them.”

Last week, Governor Rell announced enhancements to the CT FAMLIES refinancing program to assist more homeowners caught up in the sub-prime mortgage crisis in Connecticut.  The changes to the program will allow more homeowners to participate in the program and provide more direct assistance to Connecticut families facing foreclosure. 

CT FAMLIES is a refinance mortgage assistance program, established by Governor Rell and administered through the Connecticut Housing Finance Authority, to assist low-to-moderate income first-time homebuyers with adjustable rate mortgages.  Information on this program is available at www.chfa.org

Foreclosure not only presents problems for the homeowner, but also for communities in general as foreclosures negatively affect home values.  Lenders have been encouraged to work with borrowers who fall behind in their payments to try to come up with an acceptable payment plan which would allow the borrower to keep their home.

“The best advice I can give homeowners is to be proactive,”said Banking Commissioner Howard F. Pitkin.  “If you are having a hard time paying your mortgage, or expect to be in trouble when your adjustable rate re-sets, contact your lender.  It’s in no one’s interest to foreclose, and your lender is likely to be willing and able to work on a satisfactory solution.”

“Foreclosure rescue scams are an unfortunate by-product of the sub-prime problem,” said Commissioner Pitkin.  “People who have fallen behind on their mortgage are most susceptible to offers promising a quick fix.  However, homeowners in that situation should work only with their lender or with reputable HUD-certified housing counselors.”
 
The Department of Banking offers information for homeowners on its Web site, at www.ct.gov/dob.  Consumers may also call the Department’s Consumer Affairs Division if they have any questions, at 860-240-8299, or toll-free, at 1-800-831-7225. 

CHFA began taking applications for the new CT FAMLIES program on December 10th.  A call center – (860) 571-3500 – has been set up at CHFA to help assist borrowers with the program.  To date, CHFA has received more than 3,000 calls, many of them seeking more information on either the CT FAMLIES program or guidance as to how to work with the current holder of their mortgage. 
 
The Mortgage Bankers Association, in a quarterly snapshot of the mortgage market released Thursday, said the proportion of all mortgages nationwide that fell into foreclosure shot up to a record high in the October-to-December quarter.