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5 Tips for Avoiding Foreclosure Rescue Scams

September 17, 2010 by · 1 Comment 

Not A Scientologist by Ben Grubb | Flickr.comThe possibility of losing your home to foreclosure can be scary. The reality that scam artists are preying on the vulnerability of desperate homeowners is equally horrifying.

Do you know how to recognize a foreclosure rescue scam?

The foreclosure rescue scam begins with a promise to save cash-strappped homeowners from losing their home. This is generally facilitated by having the homeowner pay upfront fees to stop the foreclosure and/or to secure a new home loan. The foreclosure rescue company will even entice the homeowner and calm their fears with a money-back guarantee.

What’s better than a money-back guarantee?

Another common way the foreclosure rescue scam unfolds is when the homeowner is told to sign over the home’s deed to the fraudulent foreclosure rescue company in order to stop the foreclosure. Once the deed has been trasferred, the homeowner is instructed to halt communication with their existing mortgage company and to make all payments directly to the foreclosure rescue company.

Why would a homeowner willing sign over their home’s deed?

The homeowner under duress and fearful of losing their home is told they can rent their own home until they are financially stable. When the homeowner is back on their feet, then they could buy back their home.

Unfortunately, the primary goal of the foreclosure rescue scam is to make a quick profit through upfront fees, unapplied mortgage payments and liquidating all the available equity. The homeowner never had a chance despite their best intentions.

Here are 5 Tips for Avoiding Foreclosure Rescue Scams as outlined by The Federal Reserve Board.

  1. Work Only with a Nonprofit, HUD-Approved Counselor
  2. Don’t Pay an Arm and a Leg – Don’t Pay Fees Before Services Performed
  3. Be Wary of “Guarantees” – Legitimate Counselor Can Improve Chances
  4. Know What You Are Signing and Be Sure You Sign It – Don’t Sign Blank Forms
  5. If It Sounds Too Good To Be True, It Probably Is – Commen Sense

It can’t happen to you…can it? Just watch “Real People, Real Stories: Avoid Foreclosure Rescue Scams“.

httpvh://www.youtube.com/watch?v=GvxOC5SBEyI

The Federal Trade Commission (FTC), the nation’s consumer protection agency, wants you to know how to recognize a foreclosure rescue scam. And even if the foreclosure process has already begun, the FTC and its law enforcement partners want you to know that legitimate options are available to help you save your home.

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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Comments

One Response to “5 Tips for Avoiding Foreclosure Rescue Scams”
  1. Anna Stout says:

    Thanks so much for this information. So many people are being taken advantage of in this economy.

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