When Blanca Osollo's husband lost his job, the couple fell behind on their mortgage payments. Looking for help, they turned to a mortgage modification company the Osollos found online.
Osollo recalled, "That's the first thing they told me, not to talk to my lender and not to make any payments."
Osollo says she paid the company $4,000 and the company explained it would get the home loan modified. Six months later, the family got a foreclosure notice. Osollo says the rescue company never gave money to her lender and the loan was never modified.
"He told me there is nothing they can do anyway," Osollo said.
What happened to Blanca Osollo is happening across the country. One reason so many people give money to companies promising foreclosure rescue is that getting a real loan modification from a bank is not an easy process.
"It is hard. It is really hard," said Celine Thomasson with Neighborhood Works. "It is frustrating, it is hard work and it is terrifying, but it is your home and you have to be willing to fight for it. You have to be careful. The bad guys are out there."
Thomasson works for an agency trying to get the word out about fake foreclosure rescue companies. Thomasson says home owners facing financial problems should never shut off communication with their lenders.
She explained, "This environment has created the perfect storm that opens the window for scammers to come in and take advantage of people."
While free help is available to home owners nearing foreclosure, many banks are slow to modify loans, and refinancing isn't the only area where credit is tight.
"You can't basically get a loan done unless you have a 620 credit score," said Realtor Chad Bogany. "Everything has to be right."
Home owners facing financial problems who want to get a loan modification can go to certified HUD housing counselors for free help. That does not mean you will automatically get a loan modification, but the HUD counselors know the process and can walk you through it. You can find links to begin the process on the Consumer Blog.