The purpose of the app is to help struggling homeowners avoid foreclosure rescue scams by determining whether a company is vetted by a government agency. The app will identify qualified agencies within the AG's Homeowner Protection Program (HOPP) that assist homeowners facing foreclosure with housing counseling and legal services, and urge homeowners to use one of these agencies. There are currently85 agencies in the HOPP network.
Also as part of the initiative, the AG's office will provide monthly mailings with tips on how to avoid foreclosure prevention scams to homeowners in New York who are within 90 days of a potential foreclosure filing.
"While my office is committed to cracking down on scam operations that target struggling New Yorkers, the most powerful tool against these frauds is to ensure that consumers are informed and aware of the free services that are available to them through our Homeowner Protection Program," Schneiderman said. "Through our new education initiative, we’re putting facts in the hands of those who are at immediate risk of foreclosure – and at immediate risk of getting scammed. I encourage all homeowners to utilize AGScamHelp to check a company offering to help with your mortgage and report potential scams to our office in real-time."
Foreclosure rescue scams generally require homeowners facing foreclosure to pay upfront fees for their services, which are purported to be lowering mortgage payments or reducing principal through negotiating with the lender or servicer. After collecting the upfront fees, the scam operations fail to deliver on their promises of negotiating lower payments, increasing the risk of foreclosure.
Homeowners in New York submitted more than 2,700 foreclosure scam complaints from March 2010 to September 2014, according to a new report by the Center for New York City Neighborhoods and the Lawyers' Committee for Civil Rights Under Law. Only Florida and California received more foreclosure scam complaints during that period. These complaints in New York documented more than $8.25 million in losses, or an average of $4,183 per homeowner; however, that dollar figure can often be raised due to the loss of more money when the homes fall into foreclosure as a result of the rescue scams.
"As we continue to promote programs that keep homeowners in their homes, and help them exit foreclosure, we must ensure that we remain vigilant in identifying and rooting out scams perpetrated by fraudulent companies," New York City Public Advocate Letitia James said. "The innovative measures being announced by Attorney General Schneiderman today will protect homeowners at immediate risk of foreclosure, and help inform consumers about the growing threat of foreclosure rescue scams. Foreclosure rescue scams disproportionately target low-income, at-risk, and uninformed property owners, and I am proud to stand with Attorney General Schneiderman as he takes substantive action against predatory schemes, and seeks to educate homeowners at-risk of foreclosure."
With AGScamHelp, homeowners can search the company's name to determine if it is a member of the HOPP network or a HUD-certified counseling agency; they can locate the HOPP agency closest to them; they can file a complaint if they suspect they are working with a company or have worked with a company they suspect is guilty of a scam; and they can receive tips on how to spot and avoid foreclosure rescue scams.