Phony Counseling

Another type of foreclosure scam that homeowners should be aware of is Phony Counseling. In this scenario scammers charge excessive fees for paperwork or for making phone calls. Frequently they are papers the homeowner could fill out or phone calls they could make themselves. Often the homeowner is instructed not to contact their lender directly.

In response to the various foreclosure rescue scammers that prey on desperate homeowners the Florida State Legislature has passed Florida Statute 501.1377 “Violations involving homeowners during the course of residential foreclosure proceedings.” This statute prohibits a foreclosure rescue consultant “in the course of offering or providing foreclosure-related rescue services” from doing the following:

1. Engage in or initiate foreclosure-related rescue services without first executing a written agreement with the homeowner for foreclosure related rescue services; or

2. Solicit, charge, receive, or attempt to collect or secure payment, directly or indirectly, for foreclosure-related rescue services before completing or performing all services contained in the agreement for foreclosure related rescue services.

This means there must be a written contract between the homeowner and a foreclosure rescue consultant and that consultant cannot charge the homeowner before they complete all services.

In the coming weeks I will discuss in more detail this law and what it means for homeowners. If you or anyone you know has had contact with a foreclosure rescue consultant and they have not complied with the provisions of Florida Statute 501.1377 please contact the Pinellas County Justice and Consumer Services at 727-464-6200 or you can contact the Community Law Program, Inc. at 727-582-7480.

Juanita Carroll

Staff Attorney