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Foreclosure relief scam hits Californians close to home

Relief for homeowners has become a popular topic of discussion throughout the nation, and San Diego is no different. And for many families struggling to keep their homes while also dealing with large mortgage debt, there are a number of options to ensure a better financial future.

Bankruptcy, debt consolidation and debt settlement are solid ways of achieving a much needed restart. But while legitimate means of dealing with heavy debt are available, California residents should also be aware that some unscrupulous people have begun to prey on individuals who are earnestly looking for a path to financial stability.

One man in California, along with five companies he controlled, has become the subject of a Federal Trade Commission complaint targeting mortgage relief scams. The FTC says that hundreds of people may have been victimized by an effort to swindle homeowners looking for a financial fresh start. Specifically, the scammers used websites and phone calls to promise hundreds of consumers that their debts would be forgiven, yet all the while the scammers had no intention of delivering on their promises, leaving the paying victims out in the cold.

The scams in question involved individuals or companies who pretended to be mortgage relief specialists but weren't. This can be an effective ruse since many people who are struggling with financial burdens, including mortgages, may be considering all the alternatives to relieve debt and stop foreclosure proceedings.

The FTC is aiming to crack down on those who take advantage of people in these situations. Seeking help to address financial troubles should not lead to circumstances in which further financial damage is inevitable. Each financial situation is unique, but there are many legitimate tools, including bankruptcy, to help people who are being crushed by debt to get some breathing room while money matters are organized.

Source: National Mortgage Professional Magazine, "FTC Helps Freeze Assets of California-Based Mortgage Relief Scammer," March 22, 2012.

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