With the increasing number of foreclosures happening in the U.S. housing market, it stands to follow that there are an increasing number for foreclosure rescue scams. If you are heading towards a foreclosure you need to be aware of these scams. Even if you lose your home in a foreclosure, you lose even bigger if you become a victim of a rescue scam.
Warning Signs of a Foreclosure Rescue Scam
First let’s start off with what to watch out for, or warning signs of a Foreclosure Rescue Scam. If you have experienced any of the following you should proceed with extreme caution:
Speaking to someone who refers to their company as a foreclosure service.
Advise to pay the supposed foreclosure rescue company your mortgage payment and that they would then forward that to the lender on your behalf.
Requests that you give them your deed, or transfer your deed or title to them.
You receive any mail or door to door solicitation that is marketing services to buy your home and that mentions foreclosure.
Requests that you give the company a fee to provide you services – especially if they ask for a fee up front.
One of the best pieces of advice to give you is stay in touch with your mortgage lender if you are either going to get behind in your payments or if you are already are behind. By speaking to the lender you are showing good will and good faith in wanting to make your payments. Action such as this will go a long way to helping your cause to work something out with your mortgage lender.
What To Watch Out For If Considering a Foreclosure Rescue Company
With these warning signs in place, here is a list of things you should not do.
If you are offered a contract to sign with a foreclosure rescue company, take it to an attorney and get it reviewed. It might cost you a few dollars, but it will be money well spent. If you feel pressure to sign it even after you said that you wanted to get it reviewed by an attorney you might want to tell whomever you are working with to cease and desist their business with you.
If you are offered an opportunity to transfer your deed or title to the person doing your foreclosure rescue this is sign to stop doing business with them. This is especially true if they offer to allow you to purchase your home back after a few years of renting your home from them. If you sign over your title, this can end in a couple of ways all of which you won’t like.
The first way is that you will rent the home and at some point you will get an eviction letter or some form of move out letter stating that the house has been sold. The seller once it is theirs has the right to sell it to whomever they want in spite of what you were planning on. The second way for this to end is that the selling price back to you will be drastically more expensive than for what you were expecting which could prevent you from purchasing it back. The third is that you do purchase it back for a huge price tag and now you are paying way too much for the house compared to when the home was yours in the first place.
Always make mortgage payments directly to the mortgage company. Never ever make your payments to anyone other than your mortgage lender. The only exception to this might be in the case that you have a bankruptcy Chapter 13. Again, if you find yourself falling behind on your payments pick up the phone and call your lender. After that you want to seek out an attorney to help you with your options.
If you sign some form of sales contract make sure that it releases you from any liability of the mortgage that you have on the property. In other words make sure that your mortgage is paid off and that you no longer owe money on your mortgage. Remember, most mortgages today are not assumable, so selling your property without paying off your mortgage company is a very bad position for you to be in. Who wants a mortgage with no home? Yes, you could be stuck with a very large bill to pay with nothing to show for it.
Along the lines of the sales contract, never sign any blank pages. If you do, the foreclosure rescue company could print anything on that piece of paper in a way that it looks like you knew what you were selling.
Make sure that if you do not speak English that you have your own translator. You want someone you can trust.
False Promises of a Mortgage Foreclosure Rescue Scam
Given these 6 warning signs or don’ts about using a foreclosure rescue company here are some promises of the rescue company to be on the lookout for. Remember, you are looking for relief, so you are going to have to hold your ground to prevent you from really causing some financial damage to yourself.
We’ll cover your first couple of rent payments for your new apartment
We’ll make sure that you’ll get some money back at settlement that you can use any way that you want
We’ll buy your home “as is” without any further work on your part, just move out
A guarantee to find a buyer for your home within 10-14 days
We’ll save your credit, or help you to reestablish your credit
We’ll pay for the closing costs if you sell us your home
We’ll help you find new financing with lower payments and interest rates
The foreclosure, if it goes through, will be recorded against us if you sell us the house.
We’ll help you file bankruptcy. Filing bankruptcy only slows the foreclosure process – it doesn’t prevent it. If you go this route, do not use their attorney – go get your own bankruptcy attorney to represent you.
Hopefully in reading this article you will be more prepared to protect your home, your family’s home, and your money. It’s going to be tough enough recovering from the foreclosure without the extra added insult of dealing with recovering from being scammed too. And the last piece of advise – Consult with an attorney early on so you know your options. You do not need any surprises!