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Scams – Foreclosure Rescue

Scams – Foreclosure Rescue

1/7/2011

Foreclosure rescue scam companies target and aggressively pursue the financially distressed, who are in debt and at risk losing their homes. They try to persuade consumers that they can "save" or "rescue" their home, for a substantial fee.

Consumers pay hundreds or thousands in advance fees, but receive no assistance and end up even deeper in debt. In more severe cases, victims lose ownership of their home to a fraudulent company.

Red Flags: Be wary of any company that:

Embellishes its "success rate,"　without proof, and guarantees to "stop" the foreclosure process, regardless of financial circumstances.

Requires a fee or payment before providing services.

Accepts only a cashier’s check or wire transfer for payment.

Advises transferring the property deed or title to their company; recommending that it's best to lease out the home and buy it back over time.

Bids to purchase the home for cash; ignoring the market's current fair housing rates.

Instructs making mortgage payments to their company, instead of the lender.

Advises against contacting lenders, lawyers, or credit or housing counselors.

Collects personally identifying information before providing a written contract.

Persuades homeowners into signing contracts or agreements, without giving ample time to review and understand terms.

Refuses to provide basic information on its company, affiliated companies, length of time in business, etc.

BBB Tips:

Be wary of offers sounding too good to be true. Be cautious of smooth-talking foreclosure rescue specialists that call or come to the door claiming they can "save" or "rescue" the home.

Never sign a contract under pressure.　Refuse to sign blank or partially completed documents. In hopes of claiming the deeds to homes, some schemers will offer to complete paperwork or ask you to sign a stack of documents—promising to secure a new mortgage. Consult with a trusted family member, attorney or a financial professional before signing any documents.

Do not sign away ownership of your property. Never sign over the deed to your home, automatically expecting to be released from your mortgage responsibilities. Be wary of foreclosure rescuers offer to "negotiate" with your lender or lawyer on your behalf; the service may not be performed, as promised.

Talk to your lender. If a foreclosure "rescuer" instructs you not to contact your mortgage company or attorney, steer clear. Carefully review the terms of your mortgage. Ask your lender about how to restructure your loan payment or refinance. If these options are not feasible, consider selling the house on your own to pay off the lender.

Avoid up-front fees. If a foreclosure specialist asks for upfront fees before providing services, look elsewhere.

Find a counseling service. Get a list of legitimate foreclosure specialists approved by the U.S. Department of Housing and Urban Development at www.hud.gov. Unlike foreclosure rescue companies, there are legitimate foreclosure counseling and assistance companies that are not-for-profit organizations—which are often free or only charge a small fee. Check out free resources: Making Home Affordable or Homeownership Preservation Foundation.

Start with confidence. Always get a BBB Reliability Report at www.bbb.org on the business you are considering. Check out the company with the state’s licensing departments and Real Estate Commission.

Report Scams: Foreclosure rescue victims can file complaints with the: