Washington State has published a Foreclosure Resource and Prevention Guide from the Attorney General’s office. It’s 61 pages long which makes it not economical to print and hand out to homeowners, however it has some great prevention warnings such as “Beware of companies that charge fees to help you prevent foreclosure. Several of these companies’ practices are under investigation as scams.” Which reminds me, the National Fair Housing Alliance also released a report today “An Undercover Invesigation of Loan Modification Scams” that contains a summary of common predatory loan modification tactics including:
* 55 percent required an upfront fee to start work or required a low initial fee to conduct minimal work on behalf of distressed homeowners, such as reviewing loan documents;
* 43 percent guaranteed or promised they could secure a loan modification even before learning about the homeowners’ financial limitations;
* 24 percent advised or encouraged homeowners to stop making their mortgage payments or to stop contacting their lenders;
* 16 percent guaranteed a new, much lower interest rate ranging between two and six percent on modified loans;
* 12 percent discouraged homeowners from seeking free help from government-approved housing counseling agencies;
* Eight percent encouraged homeowners to provide fraudulent information to their lenders.
The AG’s Foreclosure Resource Guide has information about “how to write a hardship letter,” the HAFA program, how to find HUD-approved free housing counseling agencies, information about bankruptcy, the WA State Bar Assoc contact numbers, tax questions, and also lots of practical Q&As about tenants and tenants rights after foreclosure. This should be a mandatory handout that all Realtors provide to their clients who are in financial distress or at minimum, mandatory e-delivery of this document ought be required at all real estate firms.