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Foreclosure Rescue Scams To Watch Out For
For those who are desperate to keep their homes, a strong message of hope is tempting in trying times. Companies that tout ads of guarantees to stop foreclosure on your home, when you are just about to lose it, makes you want to pick up the phone and call them for help. Many that spout exaggerated messages, however, really just want your money, and have no intention in actually helping you out of foreclosure. Some even end up taking your money AND your home.
In order to protect yourself from these predators, you need to be aware of their schemes. Below are some methods scammers use to hook you into their programs for foreclosure rescue:
* Exaggerated Messages - They are initially able to hook clients with exaggerated messages that when no other company can help you avoid foreclosure, they can. Keep in mind, if the message appears too good to be true, it is.
* Upfront Fees - Scammers typically ask for a fee upfront. This is against the law in the United States. The Federal Trade Commission (FTC) provides thorough advice on what foreclosure and debt assistance companies can do. Asking for upfront fees is not one of them. Do not pay for any services from a foreclosure rescue or debt management company until they have rendered services.
* Rescue Loan - The foreclosure scammer presents what you think are new loan documents that bring your mortgage current. You sign, but what you've done is turn over the title of your home to the scammer. In exchange, you've actually acquired a rescue loan.
* Rent-To-Own - This can sometimes be a lawful option; however, it typically never works to the homeowners' advantage. What happens is a company requires you to sign over the title of your home to them and you pay rent to them for a specified period of time, usually within a year. They promise to let you buy back the home at a specified amount at the end of the rental period. Your credit has been trashed by default or foreclosure, even though you've been "rescued" by the company you are dealing with. You sign over the title of your home and now, a year later, your credit rating is so low you can't get a loan to purchase back your home. Most banks and mortgage companies do not give out home loans until two years after default or foreclosure. With scammers, however, they will sell your home without your knowledge, and you will then be evicted by the new owners. Or, the scammer will raise the rent over time, so that you cannot afford it. You make several late payments or are unable to pay and you are then evicted.
You do not have to hire a company to mediate on your behalf in order to avoid foreclosure. At the first sign that you are struggling with your payments, contact your lender. Have all your financial information in front of you, including all your debts, income and assets. If you are in default, contact a Making Home Affordable counselor at (888) 995-4673 immediately. If your monthly mortgage payments are over 31 percent of your income, you can find relief.
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