Arizona homeowners should be on the lookout for a mailing that appears to be a legal document, but may be a ploy against mortgage consumers, says Arizona Attorney General Tom Horne. His office issued a consumer warning this week about a scam targeting Valley homeowners by mail.

The mailing comes in an envelope that appears to be an official legal or government document, but there is no company name or return address on the envelope or the letter itself.  A call to the toll-free number in the letter reveals the company as Fresh Start, based in New York.

The letter informs homeowners that they may be eligible to join a national lawsuit or make a potential legal claim against a mortgage lender.  The pitch from Fresh Start is that the homeowner must first pay $2,700 for the company to do “research” and then another $2,500 to retain a lawyer.  Such up-front fees are a violation of federal regulations and Arizona consumer fraud laws. You can see what the letter looks like at:

This is the latest in a seemingly endless series of illegal or possibly illegal ploys related to Arizona’s mortgage crisis,” Horne said.  “Fresh Start claims to offer so-called audit services as a precursor to directing consumers to obtain legal assistance for mortgage holders who may have been victimized in the mortgage crisis.  But they first require as much as $5,200 up front from a homeowner. This is a blatant violation of Arizona law.”

Horne added, “The irony in this case is the consumer who brought this to the attention of my office has not been victimized in the mortgage crisis, but Fresh Start indicated he may be eligible for relief anyway and should pay the initial up-front fee for ‘research’.  Consumers need to be wary of this and other similar ploys.”

Phoenix area homeowners are often the target of mortgage and foreclosure scams, so what can you do to protect yourself from becoming the victim of fraud? “Plenty” says FBI Special Agent Scott Broshears, a mortgage fraud supervisor who works at FBI Headquarters in Washington, D.C. “And while some of these steps may require you to do a little extra work now,” adds Agent Broshears, “in the long run it may save you aggravation, money, and even your house.”

10 Warning Signs of Mortgage Modification and Foreclosure Rescue Scams

“Pay us $1,000, and we’ll save your home.” Some legitimate housing counselors may charge small fees, but fees that amount to thousands of dollars are likely a sign of potential fraud. Companies cannot collect fees until you have a written, acceptable offer from your lender or servicer and a written description of the key changes to your mortgage.

“I guarantee I will save your home—trust me.” Beware of guarantees that a person or company can stop foreclosure and allow you to remain in your house. Unrealistic promises are a sign that the person making them will not consider your particular circumstances and is unlikely to provide services that will actually help you. Providers must give you realistic evidence for any claims they make.

“Sign over your home, and we’ll let you stay in it.” Beware of anyone offering to make mortgage payments for you and rent your home back to you in exchange for the title to your home. Signing over the deed to a person gives that person the power to evict you, to raise your rent, or to sell your house. Although you will no longer own your home, you still will be legally responsible for paying the mortgage.

“Stop paying your mortgage.” Do not trust anyone who tells you to stop making payments to your lender or servicer, even if the person promises to make payments for you. If a company tells you this, it must also tell you that you may lose your home and damage your credit rating.

“If your lender calls, don’t talk to him or her.” Companies are legally barred from telling you to stop communicating with your lender or servicer. Advice like this is a good sign of a scam.

“Your lender never had the legal authority to make a loan.” Do not listen to anyone who claims that “secret laws” can erase your debt and have your mortgage contract declared invalid. You are being conned if someone claims that you are not obligated to pay your mortgage.

“Just sign this now; we’ll fill in the blanks later.” Take the time to read and understand anything you sign. Never let anyone else fill out paperwork for you. Don’t let anyone pressure you into signing anything that you don’t agree with or understand.

“Call 1-800-Fed-Loan.” Beware of providers that imitate official federal programs. Providers of mortgage relief services must tell you in their communications with you that they are not affiliated with the government. Keep in mind that assistance from a HUD-approved housing counselor is free and available by calling 1-888-995-HOPE (4673) or visiting And, you can always work directly with your lender or mortgage servicer.

“File for bankruptcy, and you can keep your home.” Filing for bankruptcy stops foreclosure only temporarily. If you do not make your mortgage payments, the bankruptcy court will eventually allow your lender to foreclose. Beware that a scam artist can file for bankruptcy in your name, without your knowledge, to temporarily stop foreclosure and give you the impression that he or she has negotiated a new payment agreement with your lender on your behalf.

“Why haven’t you replied to our offer? Do you want to live on the streets?” High-pressure tactics signal trouble. If someone pressures you to work with him or her to stop foreclosure, do not work with that person. Legitimate housing counselors do not conduct business that way.

By being an informed consumer, you can avoid these types of scams. Other resources include the Better Business Bureau, the Arizona Department of Real Estate and the Office of the Arizona Attorney General. The best way to protect yourself, whether there is a risk of fraud or not, is to have an attorney review all documents before you sign anything. If you need to speak with a real estate attorney, contact Nagle Law Group at (602) 595-3156 or by email