With the increasing number of foreclosures, the opportunity for foreclosure rescue scams increases. If you are facing foreclosure you should be aware of these scams so that you do not fall prey to them. There are legitimate ways to get help, like NACA and forbearance programs from your lender, but there are a few scams out there that you need to be aware of.
What Is A Foreclosure Rescue Scam?
A Foreclosure Rescue Scam involves a home owner who is behind in their mortgage payment and facing foreclosure. It also involves someone who offers their services to help the homeowner get out of foreclosure and save their home. What ends up happening is that the home owner’s equity in their home is stripped out so that the borrower has no chance of refinancing or getting help from their lender. The other outcome is that the homeowner ends up signing away their ownership of their home to the person helping them to be eventually forced out of their home.
How Do I Know If I Am Being Scammed Out Of My Home
Imagine this scenario. You have gotten behind on your mortgage payment by a couple of months. You get a letter in the mail from your lender that informs you that they have started foreclosure proceedings. Shortly after that, you get a phone call, or someone even knocks on your front door, or a letter in the mail from a rescuer. The rescuer offers to stop your foreclosure with one phone call, they offer to buy your home, and they might tell you that you have options, or they might offer to get you some money to catch up your debt. They might even ask you to sign over your deed. The rescuer seems a little hurried or insistent to get you to meet with them because of your situation and that there is no time to waste; they are trying to show you that they care.
Let’s take the case that you decide to meet with them. In the first meeting with them they promise things like “a new beginning”, a “chance to start over”, or a “fresh start”. You might begin to feel relieved already because you need to hear something positive about your situation. The rescuer might even give you some testimonials from folks that they supposedly have already helped. True as they might be, consider that foreclosure bailout programs don’t work for everyone and why your situation.
During the initial stages of working with rescuer, they might tell you to stop talking to any lawyers, or the mortgage company to allow the rescuer to take over the negotiations etc. While this might seem like a relief to you, what you do not realize is that it sends the wrong message to your lender. It sends the message that you done trying to work things out; it will probably end up in cutting off your ability to refinance or work out a forbearance plan with the lender. It also shortens the time that you do have to save your home.
If you are a victim to a foreclosure rescue scam, eventually you will notice that you are not getting anywhere using the rescuer. By the time you realize it, it will probably be too late for you to do anything about it. You will either lose your home to the rescuer – depending on what type of scam it is – or you will lose your home to a foreclosure process. In either case you will most likely be out a substantial amount of money and equity.
The shame of all of this is that at the end of it all you are left with having to find a new place to live, severely damaged credit, stress, and the indignity or shame of losing your home to a scam.
This is one example of how a scam might look if you are approached by someone. Again, not all rescue services are bad. You can check with the Better Business Bureau, your state Attorneys General office, and your state’s Department of Banking if you have any questions about anyone who approaches you. Definitely, before you sign on any dotted line for a rescue program, make sure you get a second opinion and check the company out with some of the folks just mentioned. Oh, and don’t listen to any testimonials – they are likely to be staged.
(New site)