Foreclosures are down but mortgage scams are on the rise, putting homeowners at risk

Mortgage foreclosures are hovering near historic lows, but a growing number of people are still having trouble paying their mortgages, while an influx of scammers loom to take advantage.

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The Minnesota Attorney General’s Office recently issued a warning about an uptick in complaints from homeowners promised relief, only to discover it was all a sham.

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“I cannot abide scammers targeting anyone in Minnesota, especially people who are already going through financial difficulty,” said Attorney General Keith Ellison in a statement. “Unfortunately, that is exactly what mortgage-assistance scammers are doing to folks who are struggling with their mortgages.”

Brian Evans, press secretary for the AG’s office, said most such cons prey on vulnerable homeowners via unsolicited mailings.

“Being in foreclosure is a matter of public record, and scammers will collect as much public information as they can find on someone to make their scam and their letter look legitimate,” he said.

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Mortgage foreclosures are still relatively rare and can vary dramatically from month to month. But there are signs more Minnesota homeowners are struggling to keep up with their payments.

ATTOM, a company that tracks mortgage data across the country, said from September to October, the foreclosure rate in Minnesota increased 18.59%. Compared with October 2023, the foreclosure rate was down 9.31%. With one foreclosure per 6,740 housing units during October, Minnesota had the 27th-highest foreclosure rate of the 50 states. The bulk of them were in Hennepin, Ramsey, Dakota and Anoka counties.

Nationwide, there was a slight uptick in foreclosure activity at that time, with 30,784 properties filing for foreclosure, marking about a 4% increase from the previous month but an 11% decrease year-over-year.