Public Employee Press

The union can help you beat mortgage scams

3 sad stories and 4 good tips that could save your home

By BOB MARTIN
Associate Director, Muncipal Employees Legal Services

As fear of foreclosure grips millions of homeowners, scam artists lie in wait for the troubled and the uninformed. The three true stories below show what can happen to members who don’t get solid advice:

• As they fell behind on their mortgage payments, Mr. and Ms. X were approached by a “foreclosure rescue specialist” who offered to refinance their mortgage at a lower rate. He tricked the homeowners into signing over the house to a third party, who remortgaged the house for a much higher amount and split the windfall with the “specialist.” Eventually the third party evicted Mr. and Ms. X from their home.
  
  
• When Ms. Doe, who was also behind in her mortgage payments, read that banks have to consider homeowners’ requests to modify their loans, she went to a “loan modification consultant,” who collected a $2,500 fee up-front but failed to have her loan terms modified.
  
  
• Mr. Smith, who was having trouble making his mortgage payments, went to a mortgage broker, who promised to re-finance the mortgage on better terms. The broker arranged an interest rate only 0.5 percent lower and charged a fee of $15,000, which was financed, so Smith is actually paying more every month!

There is a lesson in these stories. If you are behind in your mortgage or having trouble making payments, consult DC 37’s Municipal Employees Legal Services before taking any action. “Homeowners sometimes make matters worse by acting without proper advice,” said MELS Director Joan Beranbaum, “but MELS is only a phone call away.”

For homeowners or those who are considering a home purchase, MELS offers a variety of services. MELS defends members in foreclosures, reviews documents for homeowners refinancing mortgages, and helps members who are seeking to modify loans. MELS provides trustworthy advice to prospective purchasers who are embarking on the home-buying process and represents members buying one- or two-family houses or selling one-family houses.

MELS lawyers work closely with DC 37’s Municipal Employees Housing Program, whose staff are experienced in evaluating the suitability of a homeowner’s situation for refinancing. According to MEHP Director Franklin Golding, early identification of members having difficulty meeting monthly mortgage obligations helps MEHP and MELS work proactively with the members at a point where intervention is generally most effective.

If you are having a hard time making your monthly mortgage payments, MELS offers four tips:

1. Be careful — don’t get in deeper by agreeing to a new loan with bad terms. Look out for hidden fees.
2. Have a professional review the documents for any refinancing.
3. Don’t pay a penny to a lawyer or business who claims to be able to modify your loan or fix your mortgage problem.
4. Watch out for “deed theft.” Anyone who offers to rescue your home is probably trying to steal your home.

To contact MELS, call 212-815-1111. For the DC 37 MEHP counselors, call 212-815-1814.