State officials reported last week that unemployment in Los Angeles County hit a record 12.3 percent last month, with virtually all job sectors posting year-over-year declines.
Experts expect the unemployment rate to rise even further in the coming months.

In the San Fernando Valley specifically, foreclosures dropped 39 percent during August of 2009 compared to August of last year, yet concern lingers due to rising unemployment.  The Valley saw nearly 600 home foreclosures last month, down from more than 900 a year earlier, according to the Valley Economic Research Center at Cal State Northridge.  While Valley foreclosures had primarily occurred in the central and northeast Valley, they are now spreading to more affluent areas.

Sales activity is also picking up in some of the Valley's more expensive neighborhoods, which, combined with multiple offers on foreclosed properties, have helped stabilize the median price.  During August, the median price of a single-family home settled at $375,000, down 11 percent from $421,000 a year earlier and 43 percent below the record high of $660,000 recorded in May 2007.

For those of you at-risk of falling into foreclosure, beware of scams.  In Los Angeles and Orange counties alone, there are more than 200 fraudulent "foreclosure relief" companies.  With frightening regularity, they are bilking homeowners and leaving them with fewer resources and even more problems.  The most common scams are:

-  Phony Counseling: The scammer promises to negotiate a deal with the homeowners’ mortgage lender and will handle all the details.  But instead of contacting the lender or getting the mortgage refinanced, the scammer takes the fee and disappears;
-  Bait and Switch: The scammer tells homeowners they are getting a “rescue” loan to bring their mortgage current.  But the documents actually turn over the title of the house to the scammer;
-  Rent-to-buy Scheme: There are several versions of this strategy, but the bottom line is the scammer gets the title to the home and makes the false promise that the family can eventually buy back the property.  In reality, sometimes the scammers raise the rent so high the family can’t afford to make rent payments, either. In all cases, the house is lost.

The following should be red flags and should prompt homeowners to stop immediately and seek other resources:
-  Payment for services: You should not have to pay hundreds or thousands of dollars.  The old adage “you get what you pay for” does not apply to foreclosure prevention, as Los Angeles homeowners are finding out.  Fraudulent companies promise, for an up-front fee, to work with a homeowner’s lender to reinstate their mortgage.  In reality, the companies do nothing, and then skip town with the homeowner’s money. Most HUD-approved non-profit housing counseling agencies provide no-cost or low-cost counseling services. If you encounter a counselor who requires a fee prior to providing services or who asks you to make payment to their company – run, don’t walk. Never send your mortgage payment, or any payment, to a company other than your mortgage lender;
-  Guarantees: Homeowners must remember that no one can guarantee an outcome.  A trustworthy counselor will not guarantee to stop the foreclosure process no matter what your circumstance;
-  Pressure to sign paperwork that you haven’t had a chance to read or don’t understand.  Avoid any scammer who asks you to sign blank forms or volunteers to fill forms out for you.  And never release your financial information online or over the phone if the request for your financial information is unsolicited.

Ultimately, the most important guarantee of reliable help is to work only with non-profit HUD-approved counseling agencies. To ensure that these services are available, Congress provides federal funding each year for these counseling services which are offered by organizations such as NeighborWorks America.  It’s easy to find an authorized counselor nearest you:

• Housing counseling agencies funded through the federally-financed National Foreclosure Mitigation Counseling Program, which is administered by NeighborWorks America, can provide you with reliable information and assistance. (Visit www.findaforeclosurecounselor.org to find a housing counseling agency near you.)  Or you can call the Homeowner’s Hope Hotline at 888-995-HOPE, which offers approved foreclosure counseling over the phone, 24/7, in English, Spanish, and 20 other languages.
• The Department of Housing and Urban Development maintains a list of approved agencies. (Visit www.hud.gov or call 877-HUD-1515.)  HUD-approved nonprofit housing counseling agencies in the area include Los Angeles Neighborhood Housing Services (LA NHS), Neighborhood Housing Services of Orange County in Anaheim, and Neighborhood Partnership Services in Ontario, Calif.

No one can guarantee that you will avoid foreclosure.  But working with a HUD-approved counseling agency and certified counselors will increase the chances of arriving at a positive solution.  If you are facing foreclosure, we urge you to be thoughtful, careful and well-informed.