Issue date: 11/24/08 Section: News

Media Credit: Eric Poole Because of recent economic conditions, the Utah Department of Commerce issued tips and advice for homeowners on avoiding foreclosure fraud. Scams targetting homeowners, as well as misconceptions about the value of declaring bankruptcy, are a concern for Utah realtors and state officials.

The Utah Department of Commerce has issued a warning against foreclosure fraud, in light of recent economic situations.

Utah Division of Real Estate Director Mark Steinagel said in a press release that the warning offers tips on how to spot fraud and advice for those facing foreclosure.

"With foreclosure rates grabbing local headlines, we are concerned that foreclosure rescue scams will increase in Utah," he said in the press release. "Our division is warning consumers to watch out for fraud and offering tips to help them avoid becoming a victim."

Scams often include a fraudster offering to allow the homeowner to sign over the home and take the credit hit, then sell the home back to the homeowner. The Department of Commerce, in its warning, urges people never to sign their homes over to a third party.

Another misconception is that declaring bankruptcy will help. This should only be considered as a last resort, according to the Department of Commerce.

Utah Mortgage Lenders Association Executive Director John Norman said the first thing to do when a person is in danger of defaulting on a loan is to contact the lender.

"The mortgage bankers of America have some stats that show that almost 60 percent of people who are facing foreclosure never contact their service lender," he said. "That is a staggering number. So the first thing people should do is contact their lender and get that conversation rolling."

Mark Chapman, a corporate communications expert with Wells Fargo, said banks are generally willing to work with people when it comes to their home loans.

"We work diligently to help our customers be successful homeowners, and do what we can to help them avoid foreclosure when possible," he said.

Norman said banks are willing to work with people because foreclosing is often more expensive than working with a homeowner, although there are not always options.

Continued...

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