Avoiding foreclosure abatement fraud

Hawaii foreclosure filings have decreased in February 2012, but we’re still in a bit of a “foreclosure crisis” as people struggle to survive in the flailing (but gradually improving) economy. Last week, we talked about bills in the legislature that are addressing this crisis and crimes that are related to foreclosure.

Mortgage fraud is on the decline because financial institutions have tightened their lending requirements. However, foreclosure abatement fraud—which targets individual homeowners—is on the rise nationally, and there have been several instances of it in Hawaii, according to Tom Simon of the Federal Bureau of Investigation (FBI).

“Distressed homeowners get desperate, and these foreclosure abatement companies offer ‘solutions’ to save your home that sound too good to be true,” Simon explains. “They require you to pay an advance fee so they can refinance your mortgage (which legitimate companies don’t do), but they actually take your money, and do nothing. In the end, you lose your money and your house.”

The best thing to do if you’re in trouble with your mortgage, he says, is contact your lender or have someone you trust contact your lender on your behalf.

If you do get approached by, or fall victim to, such a company, you can report it by calling the Honolulu FBI office at 808-566-4300 or through www.IC3.gov if approached via internet solicitation.