Foreclosure ‘consultants’ won’t give help you want

By Russ Van Arsdale Executive director Northeast Contact, Special to the BDN
Posted Jan. 03, 2010, at 7:29 p.m.

More than 7,000 Maine people are proud to call themselves homeowners. They also are nervous because they are behind by at least one mortgage payment.

That’s the bad news. The good news is that there is more help available to people who may be facing the prospect of foreclosure.

The American Dream of homeownership has come at a heavy cost to tens of thousands of families across the country. Many were given mortgages when financial backgrounds received only cursory attention. In over their heads, these borrowers could not avoid foreclosure.

Maine’s Bureau of Financial Institutions has numerous tips about avoiding foreclosure plus sources of free counseling. Find the bureau’s Web site at www.maine.gov/pfr or call 624-8570 (toll-free 800-965-5235). The bureau collects data on foreclosures from banks and credit unions.

By the third quarter of 2009, the number of new mortgage loans in Maine had topped the total number of mortgages issued in 2008. While the foreclosure rate is lower than in other states, bureau Superintendent Lloyd Lafountaine III said, “too many individuals and families find themselves in very difficult situations.”

Of about 85,200 outstanding loans in Maine, 271 were in the process of foreclosure — that’s one in every 315. While some may find they’re “under water” (owing more than their home is worth), we’re betting most borrowers are seeking help in paying their debts.

Seek free assistance, not the “help” some opportunists offer. They call themselves mortgage or foreclosure “consultants,” offering to stop foreclosure proceedings regardless of the situation. They’ll ask for fees up front, a tipoff as to their real interests; they also may tell you to make mortgage payments to them, even transfer your title. Just say, “no thanks.”

Find real counseling at many community action programs; Penquis just signed on with Maine’s Bureau of Consumer Credit Protection for additional training of counselors to help homeowners avoid foreclosure.

Three other contracts have been signed with similar groups across the state, and two more training pacts are pending. The goal, says bureau superintendent Will Lund, is to add a half dozen counselors to supplement efforts of those already in place who can’t handle any more clients.

“We hope to be able to refer consumers [to contracting agencies] and know that those consumers are cared for,” Lund told me last week. He said each well-trained counselor can assist up to 125 people each year to avoid foreclosure.

Lund urges people to notify their lenders as soon as they’re aware of financial trouble. Your bank or credit union doesn’t want to take your home, which it may not be able to sell. Even if the foreclosure process is under way, it may not be too late to reach out.

Federal mortgage relief programs exist, but they’re often complex.

Counselors can help you gather necessary documents, negotiate with lenders and touch the bases required to let federal help kick in.

Another option for people being sued in foreclosure is mediation. As of Jan. 1, those consumers can request mediation arranged by the District Court or Superior Court. Lund says judges will be looking for trained specialists to assist those consumers, first by helping organize their finances and then by accompanying the consumers to the mediation sessions.

Whatever they do, Lund urges people not to despair and do nothing. “Denial is not a good practice,” he said.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write: Consumer Forum, P.O. Box 486, Brewer 04412, or e-mail contacexdir@live.com.

http://bangordailynews.com/2010/01/03/business/foreclosure-lsquoconsultantsrsquo-wonrsquot-give-help-you-want/ printed on December 20, 2014