Foreclosure Rescue Scam: What You Need to Know

A mortgage rescue scam offers false hope to homeowners across Long Island, but victims can take action by contacting Long Island Housing Services, Inc. (LIHS)

Victim of a Rescue Scam while facing Foreclosure?

Long Island Housing Services Says You’re Not Alone

LIHS can help homeowners learn whether they have encountered a scam, attempt to get their money refunded, and file a complaint with the New York State Attorney General. In addition, many of the services promised by mortgage rescue scams are available for free at Long Island Housing Services or through other nonprofits that offer free legal services or HUD-approved housing counseling. LIHS can help homeowners evaluate their options and make a plan. Learn more at or by calling (631) 567-5111 ext. 383 or emailing

Mortgage rescue scams target homeowners who are working hard to save their homes from foreclosure. Since the housing crisis, thousands of New Yorkers have fallen victim, so it is important to be on guard.

Here are some practices that should set off alarm bells:

  • They make guarantees about what they will accomplish (saving your home, lowering your payments, etc.)
  • They tell you to stop contacting your lender.
  • They collect a fee before providing you with any services. (Only attorneys licensed in New York may collect an upfront retainer fee, and only if providing services directly related to the client’s loan modification file. Only licensed attorneys can collect a retainer’s fee when “they are directly working on the client’s loan modification file.” And just because someone claims to be an attorney or have an attorney on staff, does not necessarily mean they are trustworthy!
  • They encourage you to transfer your property deed or title to them with promises to stall foreclosure proceedings, or to allow you to buy your house back over time.
  • They tell you to stop paying your mortgage, or to make your mortgage payments directly to them.
  • They ask you to wire money or pay in cash.
  • They give short deadlines, rush you into signing contracts, or use other high-pressure tactics to prevent you from performing adequate research or consulting with a HUD-approved housing agency.

“Many clients tell me they are embarrassed to have been taken in by a scam,” says Hannah Milem,  Outreach Coordinator for the Foreclosure Rescue Scam Prevention Program at LIHS. “But they don’t realized that these scammers are experts at convincing you that writing them a check is the best way to save your home. No one should feel embarrassed to come forward about a scam.”