State Housing Commissioner Warns: Don't be Fooled by Foreclosure Rescue Rip-offs

ALBANY, NY (04/24/2009)(readMedia)-- More than 90 foreclosure prevention counselors and legal service providers gathered today to discuss the progress of their efforts to provide free assistance to troubled homeowners facing default.

The meeting was convened by Deborah VanAmerongen, commissioner of the state Division of Housing and Community Renewal (DHCR). She was joined by Jane M. Azia, director of Non-Depository Institutions and Consumer Protection for the State Banking Department and Michael Hickey, executive director of the Center for New York City Neighborhoods (CNYCN) a not-for-profit agency created to address the lending and foreclosure crisis.

VanAmerongen said DHCR is attempting to raise public awareness of the growing incidence of foreclosure rescue scams. "Unfortunately, the economic downturn and foreclosure crisis have created a new industry of scam artists preying on vulnerable homeowners in desperate need of help. These individuals and companies are charging thousands of dollars in fees for services that are readily available, free of charge through DHCR and other government agencies and not-for-profit organizations," VanAmerongen said.

"We hope this and other forums we've held around the state will raise public awareness that there are high quality counseling and legal services available at absolutely no cost. Consumer should be wary of companies and individuals who charge upfront fees and promise to save your home from foreclosure. New York law prohibits the collection of such fees except in limited circumstances."

Azia provided an update on the Banking Department's ongoing efforts to address the foreclosure crisis, including the implementation of the comprehensive Mortgage Lending Reform Bill, which was signed by Governor Paterson last August. Her presentation included a focus on the new requirement for the registration of mortgage loans servicers, entities that service consumer loans and can work with borrowers on loan modifications, which goes into effect on July 1, 2009.

"We at the Banking Department are proud to be able to lend our support to DHCR's work in foreclosure prevention. Foreclosure, and the resulting frauds and scams, are among the most important issues that we face today," said Richard H. Neiman, Superintendent of Banks for the State of New York. "I encourage all homeowners at risk of foreclosure to take advantage of the valuable help that these housing counselors and legal aid professionals are able to provide."

The Center for New York City Neighborhoods has been on the front line of the foreclosure battle. The agency's executive director, Michael Hickey, discussed the success of a new call center, funded with a $645,000 grant from DHCR, which helps homeowners seeking assistance. "Thanks to support from the State and Commissioner VanAmerongen, the Center for New York City Neighborhoods was able to deploy a very powerful tool in foreclosure prevention," Hickey said. "The CNYCN call center, which can be reached by dialing 311 or 646-786-0888, has already helped more than 1,000 New York City residents reach free, quality housing counseling or legal services to help them in their efforts to prevent foreclosure on their homes."

DHCR created the Foreclosure Prevention Program in 2008 to provide housing counseling and legal services to homeowners facing default or foreclosure. Since last year, DHCR has awarded 30 grants to service providers in New York City, committing more than $12.9 million to fight foreclosure in the five boroughs.

The forum was one of a series being held around the state to receive feedback from the not for profit agencies, to discuss what is working best and what can be improved to better serve homeowners facing foreclosure.