Top 3 Foreclosure Scams
Scam artists follow the headlines, and know there are homeowners falling behind in their mortgage payments or at risk for foreclosure. Their pitches may sound like a way for you to get out from under, but their intentions are as far from honorable as they can be. They mean to take your money. Among the predatory scams that have been reported are:
* The foreclosure prevention specialist: The “specialist” really is a phony counselor
who charges high fees in exchange for making a few phone calls or completing some
paperwork that a homeowner could easily do for himself. None of the actions results in
saving the home. This scam gives homeowners a false sense of hope, delays them
from seeking qualified help, and exposes their personal financial information to a
fraudster.
Some of these companies even use names with the word HOPE or HOPE NOW in them to confuse borrowers who are looking for assistance from the free 888-995-HOPE hotline.
* The lease/buy back: Homeowners are deceived into signing over the deed to their
home to a scam artist who tells them they will be able to remain in the house as a
renter and eventually buy it back. Usually, the terms of this scheme 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.
* The bait-and-switch: Homeowners think they are signing documents to bring the
mortgage current. Instead, they are signing over the deed to their home. Homeowners
usually don’t know they’ve been scammed until they get an eviction notice.
Tips to Avoid Foreclosure Scams
Facing foreclosure is a terrifying time for any homeowner. With the foreclosure rate at an all-time high and the nation in economic crisis, as many as 8 million American homeowners are expected to face foreclosure through 2012, according to industry studies.
Homeowners who need help should beware of foreclosure rescue scams; the following are tips to avoid them:
* Never use any ad, person, or company that approaches you and claims to be able to “stop foreclosure now” for a fee.
* Never release your financial information online or over the phone to a company you know nothing about.
* Never send your mortgage payment, or any payment, to a company other than your mortgage lender.
* Visit findaforeclosurecounselor.org to find HUD-approved organizations that offer free, legitimate foreclosure counseling.
* Contact your mortgage lender. Contrary to what a foreclosure scammer will tell you, you should contact your lender the minute you have trouble making your monthly payment.
* If you suspect a scammer has approached you or victimized you, contact your local Better Business Bureau or state attorney general’s office. In addition to reporting a scam locally, you can file a complaint with the Federal Trade Commission (FTC). To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant: (www.ftccomplaintassistant.gov) or call 1-877-FTC-HELP (1-877-382-4357)
More Information On Scams
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