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Foreclosure Rescue Scams Target Latino Families

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Thursday, 07/29/10 10:55pm - All Things Considered

Ari Daniel Shapiro

Angel Blas, 51, stands in his backyard with one of his pet guinea pigs.

The housing crisis has been a roller coaster ride for many families, a journey riddled with scams aimed at people in precarious situations. Foreclosure rescue scams target those who’ve fallen behind in their mortgage payments and whose homes are in danger of foreclosure.

Latino communities are being especially hard hit by these schemes.

In 2002, Angel Blas and his wife bought a three-story house in Everett, Mass., a suburb north of Boston. It took time for the couple to save up for a home.

"That was my -- our dream -- you know, to live in America, to find good jobs, to go to school, to learn English and get property where you can spend more of your time," says Blas, 51, who is from Peru.

He was living his dream when he first got the house. But when he and his wife divorced, Blas’ funds grew tight.

An Offer To Help Negotiate

By late 2009, he could no longer make his mortgage payments. So, he decided to refinance. Before he had the chance, however, a law firm named United Law Group called him up.

"The United Law Group, they contacted me and they say, 'Oh, we have a good deal for you. I know you have this hardship with this problem,' " Blas says.

The representative spoke to him in Spanish. Blas says the United Law Group representative also promised to negotiate with the bank to refinance his loan.

But this offer came with a hefty cost: The firm charged Blas $3,500 upfront.

Blas says the firm didn't do anything -- except take the money.

United Law Group didn’t reply to repeated requests for an interview. The firm is under an ongoing investigation by the U.S. Postal Inspection Service and the FBI among others. In mid-March, the firm's California office was raided, but it continues to conduct business.

A National Issue

As for Blas, he’s working now with Greater Boston Legal Services to get his situation back in order. Nadine Cohen, the managing attorney of the consumer rights unit, says Blas isn't alone.

"The same people that we see targeted by these foreclosure rescue scam companies are the people targeted by the subprime loans: lower income people, people who are unsophisticated in mortgage matters, and people who don’t always speak English," Cohen says.

This is a national issue, and Latinos are among the main groups being targeted. In states including California and Nevada, the large Latino communities are especially vulnerable to these scams due to falling home values and high foreclosure rates.

"I basically think that anyone charging money for a loan modification is not a legitimate organization," Cohen says. "Anyone can go to a nonprofit housing counseling agency, a legal services organization for free."

Massachusetts is one of a handful of states fighting back with anti-fraud laws aimed specifically at these foreclosure rescue scams.

View Transcript »

ROBERT SIEGEL, host:

You're listening to ALL THINGS CONSIDERED from NPR News.

The housing crisis has been a roller coaster ride for many families; around every corner a scam aimed at people in precarious situations. Foreclosure rescue scams target those who've fallen behind in their mortgage payments and whose homes are in danger of foreclosure.

Latino communities are being especially hard-hit by these schemes, as reporter Ari Daniel Shapiro explains.

ARI DANIEL SHAPIRO: Half a dozen kids play outside on a residential street in Everett, Massachusetts, a suburb north of Boston. Back in 2002, Angel Blas(ph) and his wife bought a three-storey house on this block. Blas is 51, a compact man originally from Peru. It took time to save up for a home.

Mr. ANGEL BLAS: That is always my - our goal, to live in America, to find a good job, to go to school, to learn English and get property where you can spend more of your time.

SHAPIRO: Blas was living his dream when he first got the house, but when he and his wife divorced, Blas' funds grew tight. By late 2009, Blas could no longer make his mortgage payments, so he decided to refinance. Before he had the chance, however, a law firm named United Law Group called him up.

Mr. BLAS: The United Law Groups, they contact to me and they say, oh, we have a good deal for you. I know you have this hardship, this problem. They talked to me in Spanish, you know, and they say, we are the attorney, we're the lawyer. You don't have to pay them. Stop the payments.

SHAPIRO: That is stop the mortgage payments to encourage the bank to refinance. Blas says the United Law Group promised to negotiate with the bank on his behalf, but this offer, it came with a cost. They charged Blas $3,500 up front.

Mr. BLAS: But what happened, they didn't do anything.

SHAPIRO: They didn't do anything, says Blas, except take the $3,500. United Law Group didn't reply to repeated requests for an interview. The firm is under an ongoing investigation by the U.S. Postal Inspection Service and the FBI, among others.

In mid March, their California office was raided, but they continue to conduct business.

As for Angel Blas, he's working now with Nadine Cohen at Greater Boston Legal Services to get his situation back in order. Cohen is the managing attorney of the consumer rights unit there, and she says Blas isn't alone.

Ms. NADINE COHEN (Managing Attorney, Consumer Rights Unit, Greater Boston Legal Services): The same people that we see targeted by these foreclosure rescue scam companies are the people who are targeted by the subprime loan lower-income people, people who are unsophisticated in mortgage matters and people who don't always speak English.

SHAPIRO: This is a national issue, and Latinos are among the main groups being targeted. In states like California and Nevada, the large Latino communities are especially vulnerable to these scams due to falling home values and high foreclosure rates.

Ms. COHEN: I basically think anyone charging money for a loan modification is not a legitimate organization. Anyone can go to a nonprofit housing counseling agency, a legal services organization for free.

SHAPIRO: And there are a handful of states fighting back, including Massachusetts, with anti-fraud laws aimed specifically at these foreclosure rescue scams to prevent what happened to Angel Blas from happening to others.

For NPR News, I'm Ari Daniel Shapiro.

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MICHELE NORRIS, host:

This is NPR.