Beware Foreclosure Assistance Scams

Beware Foreclosure Assistance Scams

It’s hard to believe someone would prey upon those in the midst of a foreclosure, but it all too often happens. Scams may not always be easy to spot. Scammers will often charge already distressed homeowners exorbitant fees and provide little or no service. Here are some warning signs of a foreclosure assistance scam.

If someone who is not an attorney asks you for an upfront fee to help with your foreclosure, it may be a scam. It’s illegal for someone to charge fees in advance for services like loan modifications. Attorneys are the exception, but attorneys must comply with strict legal requirements like placing your funds in a client trust account.

If someone guarantees they can stop your foreclosure or guarantees you will receive a loan modification if you pay them, it’s probably a scam. The law forbids anyone from making such guarantees. It’s illegal for anyone to guarantee you those results.

Another piece of horrible advice scammers may offer you is to stop paying your mortgage payments entirely. Or worse yet, that you should stop making your mortgage payments to your bank and make your payments instead to them. Scammers will promise that they will handle making the payments for you. You should never send a mortgage payment to anyone but the mortgage lender or servicer.

Beware if someone asks you to sign over your deed to your house and that they will pay off your mortgage for you. Usually, scammers will suggest that it will work something like a lease-to-own arrangement. After you make that mistake, the scammer will quickly resell your home to someone else, collect the funds and leave you with a mountain of problems including an unsatisfied mortgage, a house still in foreclosure, and a new owner of your deed trying to evict you! If someone asks you to sign over your deed without consulting your attorney, you should refuse.

Finally, one of the most common scams you may fall prey to is identity theft. Only share your personal information like your social security number or bank account information with companies that you know you can trust, like your mortgage lender, your attorney, or a HUD-approved counseling agency. These organizations are strictly monitored so you know your personal information will be kept confidential.

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