Dirty deeds: Attorney General’s Office raises the red flag on foreclosure fraud

OLYMPIA, WA – September 05, 2008 – (RealEstateRama) — Rising mortgage payments have paved the way for scammers who peruse foreclosure listings. Grasping at any offer for help, their victims have paid for false promises, been cheated out of equity and, in severe cases, were tricked into transferring ownership of their homes.

Now, in an effort to shelter consumers from equity skimmers, the Washington Attorney General’s Office is using those same listings.

“It’s a new twist on ‘search and rescue,’” Attorney General Rob McKenna said. “So-called foreclosure ‘rescuers’ comb through public listings for targets. We have the same lists and we’re sounding the alarm on their underhanded tactics.”

The Attorney General’s Consumer Protection Division is mailing more than 14,000 letters this week to homeowners facing foreclosure because of missed mortgage payments.

Also starting in September, many county treasurers will include a warning from the attorney general along with the certified foreclosure notices mailed to those who have neglected to pay property taxes. Other treasurers will post the AGO warning in their offices and on county Web sites or distribute them through local newsletters and weekly newspapers.

McKenna, whose office has brought enforcement actions against businesses found to be preying on vulnerable property owners, is protecting homeowners facing foreclosure. And that means making sure the AG’s alert reaches homeowners before they’re contacted by illegitimate investors.

Benton County Treasurer Duane Davidson has already taken measures to warn local residents about foreclosure-related scams and believes letters featuring the AGO seal will help spread the message further.

“There is nothing worse than being betrayed by individuals claiming they’ll help you,” Davidson said. “Foreclosure ‘rescue’ schemes quite often do not rescue the individual from foreclosure at all, but instead put at risk what equity the owner has in the home.”

The Attorney General’s Office has placed an additional warning about foreclosure rescue scams along with resources on its Web site at www.atg.wa.gov/foreclosure.aspx. The letters and the Web site encourage property owners to seek the advice of a housing counselor before signing any contract or sale agreement.

Free foreclosure and homeownership counseling is available at www.homeownership.wa.gov or by contacting the Washington State Homeownership Information Hotline at 1-877-894-HOME (1-877-894-4663).

Media Contact: Kristin Alexander, Media Relations Manager – Seattle, (206) 464-6432