Richard Godfrey, executive director of Rhode Island Housing, says that since November 2007, roughly 4,500 homeowners facing foreclosure have come to the agency seeking assistance.

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The Providence Journal / Frieda Squires

PROVIDENCE — In a complex world of consumer fraud, schemes and scams, there’s a new face in town: foreclosure rescue counselors.

They prey on homeowners struggling with mortgage debt. They lure unsuspecting homeowners with empty promises of salvation from foreclosure’s grip. For a fee, of course.

In the past several months, Rhode Island Housing has seen many versions of the foreclosure rescue scam, some that trick homeowners into signing over the deeds to their property, or others who float quick relief methods and mortgage modification programs. Most charge a hefty price for counseling services that are normally free.

The number of people falling victim is increasing at an alarming rate here in Rhode Island and nationwide, said Richard Godfrey, executive director of Rhode Island Housing. He said that since November 2007, roughly 4,500 homeowners facing foreclosure have come to the agency seeking assistance.

With thousands of Rhode Island homeowners wrestling with delinquent mortgages amid the nation’s housing crisis, the public agency has partnered with government officials, and other agencies to ensure that homeowners are aware of these types of scams and what to do about them.

“Rhode Island ranks number 10 in foreclosures in the country. It led the nation in subprime mortgages. Now we are facing a new challenge,” Godfrey said. “We know that people are being bombarded everyday, with radio advertisements, TV advertisements [and] solicitations at home. I’m sure there are some fee-based companies or individuals which offer legit services. The problem is … there is no way to identify those who are offering legit services for a fee and those who are making promises they can’t keep.

“The only way to know that you are getting real independent services is to go to a free agency recognized by HUD.”

At a news conference held Monday morning at Rhode Island Housing on Washington Street, U.S. Rep. James Langevin, D-R.I., Providence Mayor David N. Cicilline, representatives from the U.S. Department of Housing and Urban Development, and others stressed the importance of learning how to recognize these scams, where to go for help if you’re in a foreclosure crisis, or if you’ve been taken by a predatory counselor.

“This is particularly important in a state such as Rhode Island already hit hard by foreclosures and consumers made more vulnerable as a result of our economic downturn and rising unemployment rates,” said Nancy Smith-Greer, director of HUD’s Rhode Island field office, who spoke. Greer offered several tips to spot telltale signs [see box] of a foreclosure rescue scam. “It is critically important for consumers to arm themselves with the information they need to guard against unscrupulous con artists.”

Langevin has worked on several pieces of federal legislation and has launched programs to help mitigate the foreclosure crisis. He urged people to be wary and seek the appropriate agencies for help.

“Tough times have brought out both the best and worst in people,” Langevin said. “If you are one of those people who find themselves in a difficult situation … are greeted by a phone call … offered something that is too good to be true, it probably is. Don’t get caught up in these types of scams, or these frauds.”

Godfrey said the success rate of those who have sought Rhode Island Housing for assistance has been fairly good, roughly 50 percent, but it takes time and consumers have to be willing to stick with the counseling.

Signs to watch for in foreclosure rescue scams:

•There is never a fee to get assistance/information about the Making Home Affordable Program.

•Beware of any person/organization asking for a fee in exchange for

housing counseling services or modification of a delinquent loan.

•Beware of anyone who says they can “save” your home if you sign/transfer over your property deed.

•Never submit your mortgage payments to anyone other than your mortgagor without their approval.

•Be aware of anything with a governmental-sounding name such as U.S. Foreclosures. Government agencies aren’t soliciting your business.

•Be wary of the quick fix. It took a long time to accumulate debt. Counseling and repairing debt takes time.

•Call for help. Seek out help at the first sign of mortgage trouble.

Other sources for help with foreclosures:

•Rhode Island Housing

(401) 457-1234

•HUD counseling services

(800) 569-4287

(877) 483-1515

•HOPE Now

(888) 995-4673

•Making Home Affordable Program

www.makinghomeaffordable.gov

•www.hud.gov

lsparks@projo.com