A few years ago this industry was not even on any body’s radar. Today, it is crucial that if you need help you are dealing with the right people to get help. You need to find a legitimate, authorized and experienced, not-for-profit that provide assistance and counseling for people in trouble with their mortgages. Once the public notices start coming, it is likely you will start being approached by other entities who likely care more about getting the money you could use on your mortgage, or taking your house themselves, than ever really helping you. Here are a few things to watch out for.
1. A representative of a so-called foreclosure rescue company promises to negotiate a deal with your lender, instructing you not to contact your lender, lawyer, or credit counselor during the supposed negotiations. Once you pay an up-front fee or a few months of mortgage payments, the scam artist will disappear.
2. A scam artist promises to fend off foreclosure in exchange for an up-front fee. Instead of getting you legitimate relief, the fraudster will pocket the fee and secretly file a bankruptcy case in your name.
3. Another common scam, called the bait-and-switch, results in a scam artist taking ownership of your home. You sign documents supposedly for a new loan that will make your mortgage current. What’s really happening is you’re signing over the deed of your house. In this scenario you would still owe on your mortgage but no longer own the home.
4. In a rent-to-own scheme, you’re told to surrender a home’s deed as part of a deal that lets you stay put as a renter. The scam artist, might claim to be able to refinance at a better rate with you off the title, promises to sell the house back to you in the future. However, terms of the deal may make it all but impossible for you to repurchase the home, or the scammer may get you evicted by raising the rent beyond your means. Either way, you end up losing the home while remaining on the hook for the unpaid mortgage.
Here are a few warning signs that the person you are speaking to about your problem may not have your best interests in mind:
- A demand for high upfront fees.
- Guarantees to stop a foreclosure.
- Instructions to make mortgage payments to someone other than your lender.
- Pressure to sign over a deed.
Legitimate foreclosure counselors won’t make you feel pressured or guarantee that you won’t lose your home to foreclosure. What they will do is review your financial situation and offer up options. Foreclosure counselors should not charge you a fee.
These are safe, legitimate entities that exist to serve the public and not for personal gain.
