CBS News On Upfront Fee Loan Modification, Foreclosure Rescue Scams

The CBS News' The Early Show ran a story last week on loan modification, foreclosure rescue scams that are proliferating across the country. Interviewed for the story was Illinois Attorney General Lisa Madigan, and one Illinois homeowner facing foreclosure on her condo who wound up getting clipped for $2,000 from a company that approached her with a solicitor who appeared at her front door.

• [The homeowner] says she signed a contract with a company named Foreclosure Solutions. She initially gave them $695 and later paid them another $1400 which they said they'd forward to her lender. "The things he was telling me was just what I needed at that particular time," [she] said. [She] says she believed her mortgage problem was being addressed. So imagine her shock when she found out her home was just days away from being auctioned off. "I was really, really upset. I cried. Yes, I did," [she] said. [... She] lost $2,000 and had to file for bankruptcy in order to save her home.

Illinois Attorney Lisa Madigan has filed a lawsuit against Foreclosure Solutions, charging that they did not contact consumers' lenders immediately as promised and that instead of forwarding the mortgage payments, they kept the money.

For more, see Beware Of Forclosure Rescue Scams (People Facing Foreclosure Are Being Victimized) (read text) (watch video).