Fraudulent Bank Reo Properties Prevention Schemes Abound

Legitimate agencies that helped distressed homeowners avoid bank REO properties are getting frustrating over the increasing number of homeowners getting into loan trouble and facing foreclosures.

They lament the fact that many homeowners pay for services that legitimate agencies are giving for free. Ohio’s Homeownership Center of Greater Dayton executive officer Beth Deutscher said that the increasing number of homeowners who fell prey to fraudulent bank REO properties prevention schemes is a source of frustration for people like her who aims to help borrowers in trouble.

A division of St. Mary Development Corp., the Homeownership Center provides education and counseling to existing and potential homeowners. Among the services the center offer is foreclosure prevention which is for free.

Deutscher pointed out that more and more homeowners are getting into loan problem and facing foreclosure as the economic downturn continues and unemployment increases. She said that the number of cases handled by her agency has been steadily increasing since 2006.

In 2006, the agency handled 231 cases which grew into 524 the following year and 1,162 in 2008. Deutscher expected a further increase in the number of cases her agency will handle this year. For the first five months of this year, the agency has been working with 1,037 cases.

To cope up with the rise in the number of foreclosure prevention cases handled by the agency, it doubled its workforce to make it nine full-time and two volunteers. It also opened branches in Kettering, Troy and West Carrollton to make it easy for troubled homeowners to meet with their counselors.

In the course of their work, Deutscher and her team are seeing the devastation brought about by fraudulent bank REO properties prevention schemes. She said that unscrupulous people are conning homeowners to part with their money in exchange for help in modifying their loans, which never materialize.

Policy Matters Ohio consumer affairs researcher David Rothstein advises distressed homeowners against paying for anything, especially a down payment, to avail of a foreclosure prevention workout. He added that many fraudulent bank REO properties prevention schemes ask for upfront payments just to negotiate or review documents.

He said that legitimate foreclosure prevention programs abound from states and nonprofit organizations that can really help distressed homeowners save their homes from bank REO properties.

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