The signs, tacked to telephone poles and vacant buildings, promise struggling homeowners help keeping their homes. The letters, printed on stationery from lawyers' offices, pledge to fend off a foreclosure — as long as the recipient promptly sends a hefty check.
But the money homeowners pay to these mortgage "rescue" companies never makes it into the hands of the lender. The deal is a scam and barred by state law, yet many homeowners fall for it each year, officials say.
To raise awareness of the problem, the Baltimore Homeownership Preservation Coalition, an umbrella group of 60 nonprofits working on housing issues, plans to post billboards and air public service announcements to warn those facing foreclosure to avoid the fraudulent companies — and find real help.
"It's so sad to think of people going through some of the most difficult circumstances and, when they attempt to get help, get scammed," U.S. Rep. Elijah E. Cummings, a Baltimore Democrat, said at a Tuesday news conference to launch the $31,000 media campaign to alert people to the fraud.
Angela Gravely-Smith, the coalition's vice chair, cited the campaign's slogan as she warned homeowners to "be forewarned, not foreclosed."
She urged homeowners to never pay an upfront fee to a mortgage "rescue" company, to continue sending monthly payments to the lender, and to seek guidance from a nonprofit certified by the state or the U.S. Department of Housing and Urban Development.
Mayor Stephanie Rawlings-Blake noted that it was hard to drive through city neighborhoods without spotting "bootleg" signs for sham companies. The false promises cause residents to lose their homes, destabilizing neighborhoods and removing properties from the city's tax rolls, she said.
Anne B. Norton, an acting deputy commissioner with the state labor department, said enforcing the state laws poses challenges because the sham companies are often headquartered in other states. The department often negotiates settlements between the scammers and their victims and recovered more than $875,000 for the homeowners in the past fiscal year, she said.
Neither the state agency nor the city housing department was able to say how many residents fall prey to the fraudulent companies each year. Many victims do not report the scams, Norton said.
Yvette Murray, a housing counselor with the Southeast Community Development Corporation, said her clients are barraged with letters and phone calls from scammers who find their contact information by checking public foreclosure records. As many as 20 new clients a week seek help from the offices in the 3700 block of Eastern Avenue, she said.
Latinos and recent immigrants are particularly susceptible to the fraud due to language barriers or a lack of familiarity with housing laws, said Glenda Sierra-Schulz, another counselor with the Highlandtown nonprofit.
Housing counselors help clients compile bank records and credit reports to show that they will be able to make future payments, Sierra-Schulz said. And they often help homeowners call or write to lenders to negotiate a payment plan and stay in their homes, she said.
Julie.scharper@baltsun.com