Spotting a foreclosure scam is not that easy. But it is better for you to spot the danger signs and stay away from people who carry them. Foreclosure scams usually start with ads on newspapers or websites, posters on telephone poles, median strips, bus stops or as flyers or business cards at your front door. Most of the foreclosure scams start with ads like â€œStop Foreclosure Nowâ€, â€œWe can save your Home. Guaranteed. Free Consultation.â€, â€œWe stop foreclosures everyday. We can stop yours this weekâ€. They do this to attract your attention. Once they get your attention, they employ all kinds of tactics to loot you of your money and home. Some of the warning signs of a foreclosure scam:
1. No contact with lender: The Foreclosure Rescue company asks you to stop all contacts with your lender. They offer to speak to your lender on your behalf, in order to relieve you of stress. Chances are they may not even have informed about the help they do to your lender. The company also instructs you not to contact your lawyer, credit or housing counselor.
2. Help offered even at worst situations: The â€œrescueâ€ company offers help even in the worst of situations. They say that they will stop foreclosures even if the process is on the verge of completion. Unbelievable promises and tall tales are part and parcel of such scams.
3. Fees collected before start of work: They collect a huge amount of fee even before they start any work. This fee is often for the paperwork and phone calls that you need to make. You can do them yourself.
4. Lease your home, buy later: The rescuer asks you to lease your home and then, buy it later. But that never happens as the scammer does not leave out any buying possibility.
5. Transfer property deed or title: You are asked to transfer your property deed or title to the company. Once this is done, the company gets full control over your home and sells/rents it to someone else. You lose your home and are still faced with mortgage.
6. Offers to buy the house: The company offers to buy the house with the assurance that it will sell it to you later. No such thing happens and you are evicted from the place after a few months.
7. Make mortgage payments to rescuer: The foreclosure rescue company offers you a loan and asks you to pay your mortgage payments to it and not to the lender. A clear cut case of fraud.
8. Accepts only checks or wire transfer: Payments are accepted only as checks or via wire transfer by the company. This itself is a sign of lack of authenticity.
You can report foreclosure frauds with the following authorities: The Federal Trade Commission, your state’s Attorney General or your local Better Business Bureau.
(Via Federal Trade Commission)