Councilman Eric Gioia (D-Queens) was joined at City Hall on Sunday by James Lewis, Program Director of Communities Homeowners and Neighbors Gaining Economic Rights (CHANGER), and Antoinette Coffi-Ahaib, a victim of a foreclosure scam, to discuss the rise of scams targeting homeowners.
Currently over 10 percent of New York homeowners are behind in their mortgage payments and looking for help. The foreclosure rate has gone up 34 percent since last year. Home values in New York are almost 12 times more than family income, compared to the national average of three times, as reported by the University of Virginia.
Councilman Gioia says this lends to New Yorkers being more vulnerable to foreclosures. The Federal Reserve has found that the number of scams is rising along with the number of foreclosures.
Some of the most common scams are by letter or fax. Gioia listed four of the most typical examples:
• A letter to homeowners saying that they “may qualify” for a loan modification plan and urging them to call a “Homeowner Help” hotline. The front of the letter asks, “Screwed by Your Mortgage Broker or Lender?”
• A letter from a “Private Investor” who will accept all past due property taxes.
• A fax telling the recipient that the federal government has mandated that all “toxic loans” must be modified. The header says, “Federal Government Mandate.”
• A letter notifying homeowners that they have been selected by a “Government insured institution.” The letter states that attempts made to get in touch with the homeowner had failed.
These scams follow a general pattern. They target homeowners in danger of foreclosure and offer help in exchange for a fee. However, after money is taken, little or no help is given in return, which is illegal, says James Lewis of CHANGER.
“There is a state law that you cannot charge a fee before providing the services,” Lewis said. “They’re going after people for money, and on top of that, breaking the law. Don’t pay anything. There are plenty of nonprofit organizations all over the city. If they ask you for money, turn the other cheek.”
Coffi-Ahaib described her experience with one of these companies. Her lender had told her that she could not receive a loan modification unless she had been late on her mortgage. She was advised to be late so she could qualify for the loan modification.
However, Coffi-Ahaib saw an ad that she thought could help with her financial situation and contacted the advertiser. They told her she was eligible for a loan modification and asked her to pay $4,200. When she said she couldn’t pay that much, she was given an “exception.” She was to pay $2,100 and the other half later.
The bank rejected her appeals, and two weeks later she received a phone call from the foreclosure scam company telling her she needed to pay the full amount. She then talked to her neighbor and learned that her neighbor had lost $4,500 in a similar scam. She then went to CHANGER for help on her foreclosure.
Gioia will be launching a citywide campaign, visiting civic groups and passing out fliers, to inform New Yorkers and redirect them to nonprofit groups such as the Neighborhood Economic Development Project (NEDAP), CHANGER, South Brooklyn Legal Services, and the Center for NYC Neighborhoods.
Currently over 10 percent of New York homeowners are behind in their mortgage payments and looking for help. The foreclosure rate has gone up 34 percent since last year. Home values in New York are almost 12 times more than family income, compared to the national average of three times, as reported by the University of Virginia.
Councilman Gioia says this lends to New Yorkers being more vulnerable to foreclosures. The Federal Reserve has found that the number of scams is rising along with the number of foreclosures.
Some of the most common scams are by letter or fax. Gioia listed four of the most typical examples:
• A letter to homeowners saying that they “may qualify” for a loan modification plan and urging them to call a “Homeowner Help” hotline. The front of the letter asks, “Screwed by Your Mortgage Broker or Lender?”
• A letter from a “Private Investor” who will accept all past due property taxes.
• A fax telling the recipient that the federal government has mandated that all “toxic loans” must be modified. The header says, “Federal Government Mandate.”
• A letter notifying homeowners that they have been selected by a “Government insured institution.” The letter states that attempts made to get in touch with the homeowner had failed.
These scams follow a general pattern. They target homeowners in danger of foreclosure and offer help in exchange for a fee. However, after money is taken, little or no help is given in return, which is illegal, says James Lewis of CHANGER.
“There is a state law that you cannot charge a fee before providing the services,” Lewis said. “They’re going after people for money, and on top of that, breaking the law. Don’t pay anything. There are plenty of nonprofit organizations all over the city. If they ask you for money, turn the other cheek.”
Coffi-Ahaib described her experience with one of these companies. Her lender had told her that she could not receive a loan modification unless she had been late on her mortgage. She was advised to be late so she could qualify for the loan modification.
However, Coffi-Ahaib saw an ad that she thought could help with her financial situation and contacted the advertiser. They told her she was eligible for a loan modification and asked her to pay $4,200. When she said she couldn’t pay that much, she was given an “exception.” She was to pay $2,100 and the other half later.
The bank rejected her appeals, and two weeks later she received a phone call from the foreclosure scam company telling her she needed to pay the full amount. She then talked to her neighbor and learned that her neighbor had lost $4,500 in a similar scam. She then went to CHANGER for help on her foreclosure.
Gioia will be launching a citywide campaign, visiting civic groups and passing out fliers, to inform New Yorkers and redirect them to nonprofit groups such as the Neighborhood Economic Development Project (NEDAP), CHANGER, South Brooklyn Legal Services, and the Center for NYC Neighborhoods.
