Illustration by Jon Sperry

HUNDREDS OF desperate homeowners crowded into the basement of Memorial Coliseum last weekend for workshops on how to avoid foreclosure.

Some experts did not mince words when describing foreclosure scammers. "There are a lot of folks out there that are what we would call pond slime, cat's breath, scum," said Jan Margosian, of the state attorney general's office.

In March, 648 Multnomah County residents filed for foreclosure and new scams have popped up to take advantage of the down and out. Margosian and a coalition of nonprofits want the state to take preventative action fast and pass a bill that would force lenders and homeowners to have face-to-face negotiations to avoid foreclosure.

Foreclosure scammers capitalize on the lack of actual contact between Oregon home-owners and their lenders. Names of people who are 30, 60, or 90 days behind on their mortgage sell for 24 cents a name, according to Joe Yates, president of Oregon-based LoanRefine. Yates says marketing companies call him frequently, offering to send his clients mail offers that are designed to look like they come from the government or straight from their bank. "I know they are pushing that kind of deceptive junk," says Yates.

The face-to-face mediation bill, Senate Bill 628, is modeled on a program Philadelphia started one year ago. More than three out of four homeowners who sat down with their lenders in that program are still in their houses today. According to Oregon housing nonprofit ACORN, if the same program passes in Oregon, it will avert 14,000 of the state's 20,000 projected foreclosures.

At the Saturday workshop, Margosian gave examples of scams that promise Obama stimulus dollars to people who troll Craigslist and Facebook for personal information.

"You have got to keep talking to your lender," stressed Margosian. "You don't want to be talking to all these scammers out there!"

As personal stories of scamming came out, the workshop turned a little rowdy. A man in a baseball cap at the back of the room stood up and yelled, "We need to sue 'em, class action!"

Lake Oswego resident Carii Schirle never thought her bank would duck her phone calls. But when Schirle and her husband lost their jobs in the economic crash, Schirle called her lender to adjust their mortgage. "It was absolutely ridiculous," says Schirle, who hounded the lender with phone calls and navigated mind-numbing automated menus for weeks.

"It was a complete dead end," she says. Schirle seriously considered forking over $3,500 to someone who said they would negotiate with her bank, but realized the money-up-front deal was a scam and turned to ACORN instead.

Under Senate Bill 628, Schirle's lender would have to sit down with her and negotiate face to face. Until then, the unemployed couple has a new business venture: cleaning out foreclosed homes for banks and real estate agents.