Preventing Homeowner Scams

More help is on the way to protect homeowners from costly scams.

Richard Zack is Assistant U.S. Attorney. He heads the Mortgage and Financial Fraud Section. Tim Adams is the District Director of the Mid-Atlantic Division of Neighborworks America.

Zack explained on "Good Day" his office is seeing "scammers going to people and promising to rescue homeowners from foreclosure and basically take the equity from their home and stealing their money." Zack said officials are also seeing scams "where people promise to refinance loans for people and charge a fee upfront and simply walk away with the money."

Adams said anyone who asks for money upfront is not legit. "Often that is the last time you see that money and it's not going to where they say it's going." Another warning sign of a scam is anyone who offers a guarantee that you can avoid foreclosure. "The unfortunate reality is that there are no guarantees." Adams said anyone who makes you a guarantee he can pretty much guarantee they are a scammer.

The third thing homeowners should look out for is people who have you pay them instead of your mortgage company. Adams said all money should be going to the mortgage company.

A new hotline has been set-up in Philadelphia to help homeowners. The number is 215-334-HOME. You can also report potential scams at www.loanscamalert.com