Balanced Living

October 2008

Foreclosure Rescue Scams:
Another Potential Stress for Homeowners in Distress

The possibility of losing your home to foreclosure can be terrifying. The reality that scam artists are preying on the vulnerability of desperate homeowners is equally frightening. Many so-called foreclosure rescue companies or foreclosure assistance firms claim they can help you save your home. Some are brazen enough to offer a moneyback guarantee. Unfortunately, once most of these foreclosure fraudsters take your money, they leave you much the worse for wear.

Fraudulent foreclosure “rescue” professionals use half truths and outright lies to sell services that promise relief and then fail to deliver. Their goal is to make a quick profit through fees or mortgage payments they collect from you, but do not pass on to the lender. Sometimes, they assume ownership of your property by deceiving you, the homeowner. Then, when it’s too late to save your home, they take the property or siphon off the equity. You’ve lost your home to foreclosure despite your best intentions.

If you think you may be facing foreclosure, the Federal Trade Commission (FTC), the nation’s consumer protection agency, wants you to know how to recognize a foreclosure rescue scam. And even if the foreclosure process has already begun, the FTC and its law enforcement partners want you to know that legitimate options are available to help you save your home.

How the Scams Work

Foreclosure rescue firms use a variety of tactics to find homeowners in distress: Some sift through public foreclosure notices in newspapers and on the Internet or through public files at local government offices, and then send personalized letters to homeowners. Others take a broader approach through ads on the Internet, on television, or in the newspaper, posters on telephone poles, median strips and at bus stops, or flyers or business cards at your front door. The scam artists use simple and straightforward messages, like:

• “Stop Foreclosure Now!”
• “We guarantee to stop your foreclosure.”
• “Keep Your Home. We know your home is scheduled to be sold. No Problem!”
• “We have special relationships within many banks that can speed up case approvals.”
• “We Can Save Your Home. Guaranteed. Free Consultation”
• “We stop foreclosures everyday. Our team of professionals can stop yours this week!”

Once they have your attention, they use a variety of tactics to get your money:

Phony Counseling or Phantom Help

The scam artist tells you that he can negotiate a deal with your lender to save your house if you pay a fee first. You may be told not to contact your lender, lawyer, or credit counselor, and to let the scam artist handle all the details. Once you pay the fee, the scam artist takes off with your money.

Sometimes, the scam artist insists that you make all mortgage payments directly to him while he negotiates with the lender. In this instance, the scammer may collect a few months of payments before disappearing.

Bait-and-Switch

You think you’re signing documents for a new loan to make your existing mortgage current. This is a trick: you’ve signed documents that surrender the title of your house to the scam artist in exchange for a “rescue” loan.

Rent-to-Buy Scheme

You’re told to surrender the title as part of a deal that allows you to remain in your home as a renter, and to buy it back during the next few years. You may be told that surrendering the title will permit a borrower with a better credit rating to secure new financing – and prevent the loss of the home. But the terms of these deals usually are so burdensome that buying back your home becomes impossible. You lose the home, and the scam artist walks off with all or most of your home’s equity. Worse yet, when the new borrower defaults on the loan, you’re evicted.

In a variation, the scam artist raises the rent over time to the point that the former homeowner can’t afford it. After missing several rent payments, the renter – the former homeowner – is evicted, leaving the “rescuer” free to sell the house.

In a similar equity-skimming situation, the scam artist offers to find a buyer for your home, but only if you sign over the deed and move out. The scam artist promises to pay you a portion of the profit when the home sells. Once you transfer the deed, the scam artist simply rents out the home and pockets the proceeds while your lender proceeds with the foreclosure. In the end, you lose your home – and you’re still responsible for the unpaid mortgage. That’s because transferring the deed does nothing to transfer your mortgage obligation.

Bankruptcy Foreclosure

The scam artist may promise to negotiate with your lender or to get refinancing on your behalf if you pay a fee up front. Instead of contacting your lender or refinancing your loan, though, the scam artist pockets the fee and files a bankruptcy case in your name – sometimes without your knowledge.

A bankruptcy filing often stops a home foreclosure, but only temporarily. What’s more, the bankruptcy process is complicated, expensive, and unforgiving. For example, if you fail to attend the first meeting with the creditors, the bankruptcy judge will dismiss the case and the foreclosure proceedings will continue.

If this happens, you could lose the money you paid to the scam artist as well as your home. Worse yet, a bankruptcy stays on your credit report for 10 years, and can make it difficult to obtain credit, buy a home, get life insurance, or sometimes get a job.

Where to Find Legitimate Help

If you’re having trouble paying your mortgage or you have gotten a foreclosure notice, contact your lender immediately. You may be able to negotiate a new repayment schedule. Remember that lenders generally don’t want to foreclose; it costs them money.

Other foreclosure prevention options, including reinstatement and forbearance, are explained in “Mortgage Payments Sending You Reeling? Here’s What to Do” a publication from the FTC. Find it at www.ftc.gov.

You also may contact a credit counselor through the Homeownership Preservation Foundation (HPF), a nonprofit organization that operates the national 24/7 toll-free hotline (1.888.995.HOPE) with free, bilingual, personalized assistance to help at-risk homeowners avoid foreclosure. HPF is a member of the HOPE NOW Alliance of mortgage servicers, mortgage market participants and counselors. More information about HOPE NOW is at www.995hope.org.

Red Flags

If you’re looking for foreclosure prevention help, avoid any business that:

• guarantees to stop the foreclosure process – no matter what your circumstances
• instructs you not to contact your lender, lawyer, or credit or housing counselor
• collects a fee before providing you with any services
• accepts payment only by cashier’s check or wire transfer
• encourages you to lease your home so you can buy it back over time
• tells you to make your mortgage payments directly to it, rather than your lender
• tells you to transfer your property deed or title to it
• offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale
• offers to fill out paperwork for you
• pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand

If you’re having trouble paying your mortgage or you have gotten a foreclosure notice, contact your lender immediately.

Report Fraud

If you think you’ve been a victim of foreclosure fraud, contact:

• The Federal Trade Commission
• Your state Attorney General
• Your local Better Business Bureau

For More Information

To learn more about mortgages and other creditrelated issues, visit www.ftc.gov/credit and MyMoney.gov, the U.S. government’s portal to financial education. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

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Solving the Breast Cancer Puzzle

October is National Breast Cancer Awareness Month

Investigators report headway against breast cancer, the disease that worries women more than any other. The suspects they've identified -- from heredity to lifestyle -- may point you toward precautions.

The search for this killer is full of twists -- a mystery loaded with suspected villains, flawed heroes, and hot leads.

The thousands of investigators sifting through these clues wear lab coats, not trench coats. They're trying to unravel the deadly puzzle of breast cancer.

One by one, researchers are unearthing clues to the cause, treatment, detection, and prevention of breast cancer. Breast cancer is the most common cancer among women, except for nonmelanoma skin cancers, and is the second leading cause of cancercaused deaths in women (lung cancer is in first place), according to the American Cancer Society (ACS).

Anatomy of an Enigma

To understand the puzzle, you must understand how the breasts work.

The breasts consist of glandular tissue surrounded by fat, explains Marilyn Leitch, M.D., a surgery professor specializing in breast cancer at University of Texas Southwestern Medical Center. The glandular material secretes milk after you give birth.

During the monthly menstrual cycle, the body begins the complex process of preparing the breast to make milk. The ovaries release hormones called estrogens that stimulate breast cells. The days before menstruation can be fraught with swollen, painful breasts that return to normal once the menstrual period begins, or that continue to grow if a woman is pregnant and will soon nourish a baby.

Month in, month out, breast cells change in response to hormonal stimulation throughout the reproductive years.

Experts believe this constant stimulation presents problems, says Henry Lynch, M.D., winner of the ACS 1997 Medal of Honor Award in clinical research.

"We do know," says Dr. Lynch, "that the breast is estrogen-sensitive, and we also know that certain estrogens appear to be carcinogenic. We also know that the greater the total number of ovulations a woman has in her lifetime, the greater the risk of breast cancer."

That means women who start menstruating early, before age 12, and have a late menopause, after age 55, run a higher risk. So do women who have had no children, or who had their first child after age 30.

With estrogen and other hormones as catalysts, breast cells continually receive the signal to change.

That puts the breast, says Dr. Leitch, in a class with such other highly active anatomy as the intestinal tract, where cancer also is common. It seems "active" cells have more chances to go haywire than, say, the inactive fat cells of the buttock.

But what turns rapidly changing cells into cancer? Two women may share a seemingly identical profile, but one will get the disease and the other will not.

To solve that puzzle, researchers must continue to follow the clues.

The Usual Suspects

LaMar McGinnis, past president of the ACS, cites these suspects in the breast cancer probe:

• Diet and lifestyle: Overweight women seem more prone to breast cancer. Dr. Leitch says fat cells can make and store estrogen, perhaps increasing this hormone's effect on the breast. Saturated fats, such as those in red meat and full-fat dairy products, have been closely linked to other types of cancer, and researchers are probing their role in breast cancer. Alcohol consumption can raise estrogen and may increase risk. So can a sedentary lifestyle.
• Family history and genetics: A woman's risk increases if close blood relatives of either parent have had breast cancer. Scientists have discovered mutations in two genes, BRCA1 and BRCA2, which they blame for about 5 percent of breast cancer in the general population, but higher rates in women of Ashkenazi Jewish ancestry. Dr. Lynch says 80 percent of women who carry these genes will likely develop the disease. But experts believe just a fraction of the female population -- roughly 0.2 percent -- has one of these two genes.
• Personal history: Dr. Lynch says "lumpy" breasts, common among women, do not increase breast cancer risk. Several breast conditions are harmless, including fluid-filled sacs called cysts and solid round tumors called fibroadenomas. But cysts in one breast condition, fibrocystic disease, do increase cancer risk. Any unusual breast lump must be checked by a doctor; 80 percent prove to be benign. Previous cancer in one breast also is a risk factor.
• Our world: On the environmental front, research is under way into the role of pesticides, engine exhausts, and contaminants in food and water. Scientists have not confirmed any absolute link.

Reducing Your Risk

Over their lifetime, one in eight women will get breast cancer. Here's how you can cut your risk:

• Get regular mammograms and breast exams. Talk with your doctor to see how often you should be tested and how young you should start -- decisions that may be influenced by your risk factors. Mammograms can detect a lump far earlier than you can feel it.
• Think low-fat and high-fiber. Include 5 or more fruits and vegetables per day. A healthy, nutritious diet may help decrease the risk of several cancers.
• Try to keep your weight normal. A recommended range is a body mass index (BMI) of 19.5 to 25. To calculate your BMI figure your weight in kilograms and divide it by your height in meters squared (kg/m2).
• Regular exercise will keep your weight down.
• If you drink alcohol, stop at one drink a day (or less).
• Considering hormone therapy (HT) after menopause? Although HT may offer benefits for menopausal symptoms and in the prevention of osteoporosis, it increases other health risks. Talk to your health care provider to see what is best for you.

Preventive Options?

• Tamoxifen: This anti-estrogen drug has long been used to treat breast cancer, but a recent study found preventive benefits, as well. Tamoxifen cut breast cancer 45 percent in highrisk participants. Still, the National Cancer Institute reports the drug can have serious side effects, including a higher risk of endometrial cancer and blood clots. As a result, experts recommend limiting it to those at greatest risk. Three new drugs are now being evaluated for these same indications: anastrazole, exemestane, and letrozole.
• Raloxifene: This "designer estrogen" may cut the risk of breast (and uterine) cancer while imitating estrogen's benefits for your bones and heart.

For more information:
http://www.nbcam.org/
http://fhahelps.personaladvantage.com/cancer/

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13 Ways to Make Halloween Safe

1. Wear makeup instead of masks. Use hypoallergenic formulas. Have an adult apply the makeup and remove it with cold cream instead of soap and water.
2. Avoid costumes with masks, wigs, floppy hats, or eye patches that block vision.
3. Avoid pointed props such as spears, swords, or wands that endanger other children's eyes.
4. Wear bright, reflective clothing or have reflective patches somewhere on the costume.
5. Carry a bright flashlight to illuminate sidewalks, steps, and paths.
6. Never drive while wearing a mask.
7. Obey all traffic signals, whether pedestrian or driver.
8. Younger children should be accompanied by an adult while traveling about the neighborhood. Older children should trick or treat in groups.
9. Use common sense. Never dart out between parked cars or hidden corners such as alleys. Avoid streets under construction. Don't trick or treat in busy commercial areas or where there is heavy traffic.
10. Inspect all trick or treat items before allowing children to have them.
11. Be sure the path and stairs to your front door are well illuminated and clear of obstacles.
12. Daylight trick or treating is safer than going out after dark.
13. Halloween