Charitable Giving: Here's Help for Avoiding Foreclosure Scams

Frustratingly, foreclosure remains a persistent problem for residents of Central Maryland, especially Baltimore City. In the first half of 2010, there were 3,663 foreclosures filings in Baltimore compared to 2,853 filings for the first half of 2009.

With changes in Maryland law and the national slowdown in filings, the numbers were down for the third quarter of 2010 but are expected to increase again in 2011.

Recently the Baltimore Homeownership Preservation Coalition, in partnership with NeighborWorks America, launched a campaign to tackle a specific aspect of this problem: loan modification scams. Scammers use the Internet, informal networks and signs attached to utility poles to advertise their services and take unfair and illegal advantage of desperate homeowners.

They make impossible promises - such as guaranteeing to "fix" a mortgage and save a family's home - and charge steep fees for services they do not deliver. Victims end up losing their homes and incurring heavier debts.

Negative impacts

The negative impacts of foreclosure are widespread and long-lasting. With unemployment and under-employment both high, many homeowners are having trouble making their mortgage payments, and some face the difficult choice of what to do when the loan is worth more than the home. In hard-hit areas, houses shift from owner-occupied to rental or they sit empty, and residents on the sidelines of the crisis find their neighborhoods becoming less stable and less safe.

To warn people away from destructive scams, local and national philanthropies are providing leadership and support for BHPC, an alliance with over 50 member organizations, including nonprofits, neighborhood groups, governmental agencies, businesses and professional associations.

Based at the Baltimore Neighborhood Collaborative, a project of the Maryland Philanthropy Network, BHPC was formed in 2005. Its first marketing campaign - "Mortgage Late? Don't Wait!" - encouraged homeowners in delinquency to contact a nonprofit housing counselor.

The new BHPC campaign warns homeowners at risk of foreclosure to "Be Forewarned, Not Foreclosed" by recognizing and avoiding scammers' schemes. NeighborWorks America is providing funds for the campaign's ear- and eye-catching radio spots, billboards, bus ads and fliers.

Philanthropic support

Philanthropic dollars may be less visible but they are no less important to this campaign and BHPC's broader efforts to prevent and mitigate foreclosure. The Open Society Institute provides substantial funding for staffing, data gathering and programs at BHPC and partner organizations. The Annie E. Casey, Goldseker and Krieger Foundations offer vital operating support to the coalition.

In addition, program officers at the Abell Foundation put in long hours as leaders of key BHPC committees. Through the Baltimore Neighborhood Collaborative, other foundations as well as banks fund foreclosure prevention services at nonprofit housing counseling agencies throughout Baltimore.

The philanthropic community's impressive level of financial and personal commitment has proven crucial to addressing the foreclosure crisis in Baltimore.