Probably the letter is identical to a government form. It seems that the logo may be official. The Web site address may sound like an agency that provides you help.

But there are good chances that they all are nothing but a scam.

Foreclosure crisis has given rise to fake foreclosure rescue companies

The ongoing mortgage foreclosure crisis has given rise to a cottage industry of so-called ” foreclosure rescue” companies. But the people are warned by the advocates and government officials that a significant number are little more than fraudulent operations that are aimed to separate distressed homeowners from their money, and sometimes their houses as well.

Several types of these companies have emerged as the mortgage meltdown accelerated; this has been said by Gary Almond of the Better Business Bureau in Los Angeles, one of the areas where mortgage housing crisis has hit hardly.

These companies have even drawn scrutiny from the FBI. This has been done because of the role played by the mortgage industry in the nation’s economy and the types of crimes represented by mortgage fraud. The feds currently have nearly 2,350 mortgage fraud cases, which has risen almost 400 percent from five years ago.

Even for wary consumers, it might be difficult to tell if the line being thrown by a company will sink you.

A letter sent out by Bridgewater earlier this month, is a good example of the difficulty assessing a company.

It is Difficult to Assess a Fake Company

The letter is designed such that it resembles a W-2 or other form from the Internal Revenue Service; it has boxes across the top and a similar typeface. The letter suggests that the recipient “may be eligible for a special modification program in accordance with the guidelines created in conjunction with the Government Stimulus Program HR 1106: Helping Families Save Their Home Act.”

Actually the plural “Homes” is used by the bill in its title that bore that number in the House of Representatives, it was suggested by the consumer advocates that a subtle misspelling is the type of thing that should be a red flag for recipients.

It was also stated by the letter that “only an attorney or licensed debt adjuster can legally represent a borrower for a mortgage modification.”

That’s not true, said by Dan Crevina, director of operations and marketing at the BBB of New Jersey. It was said by him that representations are not needed to call the bank. He further said that the same thing will be done by them what customers can do.

The advice from advocates and government agencies even echoes in one comment in the Financial Solutions letter, when consumers are deciding to take help from any private company: The advice was that “Beware of companies that ask you to pay for services upfront.”

No Fees is Charged by Nonprofit Agencies

No fees is charged by the nonprofit agencies for their services, that are working with government programs to help homeowners in danger of foreclosure, and in some states lenders are prohibited  from charging fees in advance of providing services.

What homeowners can do is that they can call the federal government’s Hope Now program at 888-995-HOPE, or visit http://hopenow.com to find legitimate assistance. The site also contains a calendar of free events around the country where help is available on site, and it also has lists approved nonprofit counseling agencies nationwide that offer free help.

The homeowners can also get details about government programs and counseling referrals from here at http://www.makinghomeaffordable.gov/

Methods Followed by these Companies to find their Targets

The companies that are operating scams use several different kinds of ways to find their targets. Besides that they advertise heavily, they also start their search for public records for default notices or mortgages written in the last few years by banks known to issue risky loans, and when they get the addresses of such people they send letters or make calls to those addresses.

Last month, lawsuits were filed by the FTC against five companies as part of a crackdown on mortgage modification and foreclosure rescue scams.
It was said by The FTC that these companies presented so-called guarantees and high success rates just in order to mislead consumers about their services; they also charged upfront fees that is not charged by legitimate nonprofit organizations; and the also used copycat names or used look-alike Web sites to disguise themselves to be a nonprofit or government entity.