Foreclosure Counseling Scams

Thieves and scammers, unfortunately, are finding ways to take advantage of people who are in desperate situations in this current foreclosure crisis.       

If you are finding that you are falling behind in your mortgage payments, make sure that you read the below scams that are currently robbing people of their money, before you speak to and/or give any money to a Foreclosure Counselor.  The tips below could help protect you from loosing thousands of dollars.

Phony counseling or foreclosure rescue scams: The scam artist poses as a counselor and tells you he can negotiate a deal with your lender to save your house, but only if you first pay him a fee.

He may even tell you not to contact your lender, lawyer, or housing counselor and that he’ll handle all details. He may even insist that you make all mortgage payments directly to him while he negotiates with the lender.

But once you pay the fee, or a few mortgage payments, the scammer disappears with your money.

To protect yourself, avoid a company or person who asks for a fee in advance to work with your lender to modify, refinance, or reinstate your mortgage. They may pocket your money and do little or nothing to help you save your home from foreclosure.

Also, don’t stop communicating with your lender. That’s the worst thing you can do. The minute you have trouble paying your mortgage, contact your lender.

And never send a mortgage payment to anyone other than your lender.

Fake government modification programs: Some scammers may claim to be affiliated with, or approved by, the government, or they may ask you to pay high, upfront fees to qualify for government mortgage modification programs.

The scammer’s company name and website may sound like a real government agency. You may even see words on the site like federal, TARP, or others related to official government programs.

Don’t be fooled. Before you sign up, contact your lender, who can tell you if you qualify for any government programs. And you don’t have to pay to benefit from these programs.

Bait and switch: The scam artist may try to convince you to sign documents for a new loan modification that will make your existing mortgage current.

This is a trick. You’re actually signing documents that surrender the title of your house to the scam artist in exchange for a so-called rescue loan.

Rent-to-own or lease-back scheme: The scammer tries to deceive you into signing over the deed to your home and promises that you can remain in the house as a renter and eventually buy it back.

Usually, however, the terms of this deal are so demanding that the buy-back becomes impossible. The homeowner gets evicted, and the “rescuer” walks off with most or all of the equity.

A variation of this scheme has the scammer raising your rent over time to the point that you can’t afford it. After missing several rent payments, you’re evicted, leaving the scammer free to sell your house.

Don’t be afraid to report any scams.

“Many homeowners fail to report because they don’t see themselves as victims of a crime,” Thomasson said. “Instead they might think they made a poor business decision or that that they misplaced their trust. Even those who do acknowledge that there is crime realize that it is likely that the company or person who scammed them is gone and not going to be found and that they likely would not get their money back.”

If you find yourself the victim of a scam, report it so that more people aren’t victimized. It will help authorities build cases against the scammers.

To read this article in its entirety, see HERE 

Do you have further questions about foreclosures, short sales, or how to buy or sell a home in this current real estate market?  Then call me or send me an email.  It would be my pleasure to answer all of your questions:

LeeAnn Bell, REALTOR(R) ... 661-309-2364
LeeAnnRealtor@yahoo.com

DRE License #01260650

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(c) 2010 LeeAnn Bell

All comments welcome

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