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Foreclosure Rescues Offer False Hope At A Price

ARI SHAPIRO, host:

And from cars to houses now. If you're renegotiating your mortgage, you should not have to pay someone in advance. That's the message from state and federal officials who are cracking down on schemes that claim to help struggling homeowners. NPR's Scott Horsley reports.

SCOTT HORSLEY: For struggling homeowners in the Chicago area facing the threat of foreclosure, radio ads like this one dangled the promise of relief.

(Soundbite of TV ad)

Unidentified Man: (Spanish spoken)

HORSLEY: We're experts at stopping your foreclosure without having to file for bankruptcy, the ad says. If the American Dream is giving you nightmares, call us today. Illinois Attorney General Lisa Madigan says those who did call got a rude awakening though when the advertiser took their money but did little to stave off foreclosure. And Madigan warns the same thing could happen to any at risk homeowner who puts his trust in for-profit mortgage rescue offer.

Ms. LISA MADIGAN (Illinois Attorney General): If you are struggling to make your mortgage payment or if you are facing foreclosure, stay away from anyone who says that they will save your home for money upfront. Whether they call themselves foreclosure rescuers or mortgage consultants, these operations are almost always scams.

HORSLEY: Madigan's office has sued two dozen foreclosure rescue companies in Illinois, and last week, the Federal Trade Commission sent warning letters to more than 70 others suspected of deceptive marketing. Authorities say in some cases, the companies appeared to be masquerading as part of the government's own foreclosure relief efforts. The difference is the government's programs are free.

Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley
Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.