Foreclosure rescue scams can waster your money, ruin your credit record, and wipe out any equity you have in your home. Here are some useful tips to help you protect yourself from foreclosure rescue scams.
Be Aware of Rescue Scams
Be suspicious of anyone that solicits you for a mortgage modification, especially if they ask you to pay an upfront fee. Many for-profit companies that promise they can get you a modification will simply take your money and provide little help. Even legitimate for-profit companies will charge you for a service that you can get for free from a not-for-profit counselor that is funded by the Attorney General’s Office, or that you can do for yourself.
Loan Modification Scams: Scam artists scour foreclosure notices and filings to find potential victims desperate to save their homes. They may solicit you in-person, by mail, e-mail or telephone, or via advertisements, including TV and radio commercials, and often promise that they can save your home from foreclosure. Be wary of anyone that makes outrageous claims, like a 90% or 100% success rate in achieving modifications, or claims to be affiliated with the government. Many scam artists use official-looking logos, names or website addresses to make you think they are part of an official government program, such as the federal HAMP program or the National Mortgage Settlement. Remember, you can be referred to free assistance from government approved, not-for-profit housing counselors and legal services by calling the Attorney General’s foreclosure prevention hotline at 855-HOME-456 or by simply calling 2-1-1.
Lease-back or Repurchase schemes: Be very suspicious if someone offers to pay your mortgage and rent your home back to you. This scheme often involves signing over the deed to your home with the option to buy it back later. The terms of such transactions are so complex or fraudulent that homeowners are rarely, if ever, able to repurchase their homes. Sometimes the property is sold to another party without the homeowner’s knowledge.
Suspect any advertisement, person, or company that approaches you and demands an up-front fee before providing foreclosure prevention services.
Consult with a certified housing counselor or legal services attorney before signing any agreement for foreclosure rescue services.
Know what you are signing and understand every document you sign. Seek advice from a lawyer or an approved counselor before signing any agreement involving title to your home or refinancing your mortgage.
Foreclosure consultants must give you a written contract that gives you the right to cancel within five business days and is written in the same language that you used in discussions with the consultant. Get promises in writing because oral promises and agreements relating to your home can be very difficult to enforce. Be wary of anyone that will not provide a written contract.
If you believe you have been scammed by a foreclosure rescue operator or a debt relief organization, please submit a complaint to the Attorney General’s Office. Remember, you can also call 855-HOME-456 or 2-1-1 to be connected to a free, not-for-profit housing counselor or legal services attorney.