How to Avoid Foreclosure Scams Articles | Foreclosure

By: Guy Starbuck

Because the whole process of losing a home tends to be a rather scary experience, foreclosure can also leave a person vulnerable to scam artists. When you are facing foreclosure, you should make careful investigations into your available choices and check for the veracity of any source which comes to offer help, even when they look reputable.

Foreclosure rescue scams are big money for those involved, even adding much more heartaches to the problems of people who are already faced with losing their homes.

One of the more common scams which are dangled in front of desperate mortgage holders, is the so called “ credit counseling” which is offered by a number of organizations which make promises that they will help homeowners negotiate a lower interest rate or lower monthly payments in order to stave off a foreclosure. All this then comes at a very expensive fee. Of course credit counseling services actually exist and they can help but you should be wary of any service which offers promises that they can completely erase your debt.

One more scam which is rather popular these days is the one that claims you can “save your house” and “pay off your mortgage”. The whole gist behind this scam is that homeowners are convinced to sell their home to an agency for the amount of the mortgage payoff and then rent it for a specified amount of time with the option to re-buy it when they get back on their feet. However, the problem is that as soon as the deed has been signed over to the so-called agency, you have no rights over your home, even to stay there. Any new owner agency or otherwise is not required to rent it to you or sell it back. Usually, in most cases you get evicted with no option to buy back or rent your home as previously promised.

Certain other scam artists will make moves to pay off the mortgage on your home for a flat fee in order to become the new mortgage holder. Doing this is equivalent to signing over the ownership of your home.

How then can you avoid being scammed when you are most susceptible?

• Be suspicious of any person or company that calls themselves a mortgage consultant or foreclosure service
• Never trust anyone who solicits business through the mail or door-to-door
• Be wary of anyone who offers to lease back your home or allow you to buy it back in the future.  You need to question what they really have to gain by such an investment arrangement?
• Beware of any company who makes promises to save your credit or save your home, especially with little or no effort or consequences on your part. The experts know this is unrealistic.
• Never sign any documentation that you don’t completely understand. If it doesn’t make sense, wait!

Anything which sounds too good to be true, most often are. Real companies who want to help you out will have a serious chat with you and scour through your financial details. They will then present you with a plan which aids you to stave off foreclosure. Everything is also put into writing and it isn't all talk. Various ways exist to stall foreclosure and a number of agencies will willingly guide you through the process. What you should do is take time and make sure that you investigate any agency completely in order to avoid getting scammed.