Rhode Island Housing has started warning homeowners about an on-the-rise national problem: predatory scammers who say they’ll help struggling homeowners and stave off a foreclosure. But what the homeowners get, sometimes, is a deal that leaves them without a house.

Executive Director Richard Godfrey spoke with Providence Business News about the issue.

PBN: Could you tell me a little about the “scams” that you’re seeing?

GODFREY: There are companies and individuals out there promising to rescue homeowners who are in trouble but are instead swindling them out of money that they cannot afford to lose. In some cases, they are tricking them into signing over their homes, leaving them with no home and a mortgage they could not afford in the first place.

The U.S. Department of Housing & Urban Development and the U.S. Treasury Department’s Office of the Comptroller have warned that foreclosure scams are popping up at an alarming rate nationwide and consumers should “always proceed with caution when dealing with anyone offering to help modify their mortgage or avoid foreclosure.” These scam artists act and look just like the companies that are reputable – sending letters and e-mails and following up with phone calls. They often advertise on television, radio, the Web and in newspapers.

PBN: What should homeowners be on the lookout for?

GODFREY: There are some ways to identify a potential predator versus a reputable company. Unfortunately, it is not always a clear and easy distinction.

First and foremost, remember you do not have to pay for help or for any government benefits. HUD-approved counseling agencies offer free help and lenders can also help their customers determine if they qualify for help as well.

Beyond that, we suggest being cautious of any company or person that looks or acts like a government agency. Be wary of claims offering “government-approved” or “official government” loan modifications. Predators may use letterhead that looks like official government stationery. They may have company names and Web sites that are very similar to government agencies. Other predators may describe themselves as “foreclosure consultants” or “mortgage consultants,” offering “foreclosure prevention” or “foreclosure rescue” services. Once again, you do not need to pay for foreclosure help.

PBN: Have many Rhode Island homeowners been victimized?

GODFREY: It’s hard to say, since many victims choose not to report their situations. Many people in this situation blame themselves or they are too embarrassed to report that they’ve been taken advantage of. Although only a few Rhode Islanders have filed criminal complaints, our Help Center and counseling partners are reporting a significant increase in the number of homeowners who have been approached by predators.

We know that predators go where the prey is abundant so Rhode Islanders are at particularly high risk, given that we are ranked 10th in the nation for foreclosure activity. Unfortunately, potential victims are easy to find. Mortgage lenders are obligated to publish notices before foreclosing on homes. There are companies that compile this information and sell the lists. Once predators have that information, they approach the homeowners.

PBN: What advice is Rhode Island Housing offering to help homeowners steer clear of these scams?

GODFREY: Rhode Island Housing has been working closely with the attorney general’s office, the R.I. Department of Business Regulation and our counseling and community partners to help those who have already been approached and to educate and protect all Rhode Islanders from this fraudulent activity.

Never sign your home over to an intermediary. Never sign anything you do not completely understand.

PBN: And if someone is having trouble affording their home and is at risk of foreclosure, what legitimate steps should they take?

GODFREY: The best advice we can give is to seek free help at the first sign of financial trouble. The last thing we want to see is homeowners, most of whom are already in trouble because of predatory activity of the past, be victimized again. Again, our Help Center is a great place to start.

It is important to remember that there is free help for homeowners by calling a HUD-approved counseling center – like Rhode Island Housing’s Help Center.