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They paid for help, but still lost their home

By ASSOCIATED PRESS
Published April 18, 2007

Eylonda and Tyrone Wynn of Dallas thought their prayers had been answered when two young women from Resolutions Foreclosure & Home Mortgages knocked on the door in December 2005.

"It was like, 'Yes, we can save our house. We can start over again,' " said Eylonda Wynn, a 37-year-old mother of three.

Rising medical bills had put them behind on the mortgage payments for their three-bedroom house on a quiet street in Cedar Hill, Texas, a Dallas suburb. Their mortgage lender, Countrywide Financial Corp., was threatening to foreclose.

The Wynns paid Resolutions $950 to negotiate a repayment plan, and in January 2006, Resolutions told the Wynns the lender had agreed. But a month later, after they still hadn't received any paperwork, they found out their house was to be auctioned that day and their file at Resolutions had been closed. They were forced out of the house in March, four years after buying it.

A Resolutions official blames the Wynns for not following through on their efforts. But the couple's experience highlights one of the risks for homeowners who find themselves desperately trying to avoid foreclosure: You may simply wind up losing more money.

Experts recommend that homeowners screen offers carefully, and take the following precautions:

- Don't pay upfront fees to any person or organization promising help.

- Don't sign anything without having an independent lawyer review it.

- Seek out accredited financial counselors, using lists such as those kept by the Department of Housing and Urban Development. Its list is at www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm.

While no one tracks the number of foreclosure aid providers, real estate professionals and consumer advocates nationwide say questionable practices are rising, especially in areas such as southern California, Las Vegas and southeast Florida, where a housing boom was fed by a sharp increase in mortgages to borrowers with riskier credit.

Easy targets

Finding homeowners in trouble has become easier as Web sites dedicated to listing default and foreclosure information proliferate. So-called foreclosure rescuers then contact homeowners.

"These guys are suggesting they have the ability to protect the homeowners, when in reality they're not doing anything," said Al Ripley, a consumer advocate and attorney for the NC Justice Center in Raleigh, N.C. "They take advantage of people in desperate circumstances."

The Better Business Bureau of Dallas said five complaints were filed by individuals against Resolutions between October 2005 and July 2006 that sound similar to the Wynns' story.

Lauren Saunders, the managing attorney for the Washington, D.C., office of the National Consumer Law Center, said her group is drafting proposed guidelines for regulations on foreclosure rescue operations. A dozen states - California, Colorado, Georgia, Illinois, Maryland, Michigan, Minnesota, Missouri, New York, Rhode Island, Washington and Florida - have adopted laws designed to help protect homeowners.

All this comes too late for Wynn and her family, who live only a few blocks away in a rented home.

"We have to pass that house every day and someone else is living in it," she said.

[Last modified April 18, 2007, 02:48:22]