Lincoln, Neb., Aug 22, 2007 — Nebraska Department of Banking and Finance Director John Munn issued a consumer advisory today urging Nebraskans facing the possibility of foreclosure on a home mortgage to be cautious when working with foreclosure rescue consultants and companies. Recent inquiries to the Department regarding foreclosure have prompted Department officials to warn Nebraskans of the potential risks associated with foreclosure rescue services.
In many foreclosure rescue deals, individuals or companies offer to take ownership of the property as part of an arrangement that allows the homeowner to lease and buy back the home at a later date. The rescuer often promises to save the homeowner from foreclosure, pay the mortgage, save the homeowner’s credit status and/or sell the house quickly. Distressed homeowners are often pressured into signing documents giving ownership of the home to the rescuer and the rescuer walks away with all or most of the home’s equity.
“We advise homeowners facing foreclosure to be cautious consumers and talk with licensed professionals such as lawyers and real estate agents before signing any agreement,” Munn said. “If the terms sound too good to be true, I would stay away.”
While the Banking Department can’t stop foreclosures, Munn said borrowers can file a complaint with the agency against individuals or companies for deceptive and misleading lending practices.
“We cannot serve as an attorney, but we can contact the appropriate regulatory authority with issues described in the complaint,” said Minn. Borrowers can find the complaint form on the agency’s Web site at http://www.ndbf.org
There are several things homeowners can do to try to avoid foreclosure, Munn said. He suggested contacting the lender first to see whether a new payment plan can be worked out or the loan refinanced. If that doesn’t work, he said people should contact an attorney or credible housing counselor. A list of additional consumer resources can be found on the department’s Web site.