Foreclosure assistance-loss mitigation-avoid foreclosure

Avoiding Scams

Here are a few tips to remember when facing foreclosure. There are many companies out there that claim to be the "professional foreclosure assistant" but really try to scam you.

• Beware of so-called foreclosure rescue companies that contact you after the foreclosure has been filed in court and promise to help you in exchange for an up-front fee.

• Steer clear of foreclosure assistance experts who want you to make your mortgage payment to them, or who discourage you from talking to your mortgage company or an attorney.

• Watch out for equity skimming. This scam happens when a buyer promises to pay off your mortgage if you sign over the deed to your property. The buyer then rents out your home but doesn’t make mortgage payments and the bank forecloses. Remember, signing over your deed does not mean you’re no longer responsible for paying your mortgage.

• Other scam tip offs: the schemer refuses to put his or her promises in writing, pressures you to sign paperwork you haven’t had a chance to read thoroughly, or offers to fill out the paperwork for you.

Here are a few common techniques used in foreclosure scams:

• Bailout - Here the scammer bails the homeowner out by helping them get rid of their house. The way the scammers get the house varies, but each method ends with the homeowner surrendering the title to the house on the promise that they can stay on as renters and buy the house back once things have been "fixed." In the end, of course, the homeowner can't buy the house back and the supposed rescuers get most, if not all, of the equity.

• Phantom help - In this scam, the supposed rescuer charges very high fees for basic phone calls and paperwork that the homeowner could have done. Or, the rescuer will make promise to represent the homeowner but will not follow through. This is really a too little too late scam as in the helpless homeowner receives too little (or no) help too late to stop the foreclosure from taking place.

• Bait and switch - This is much worse than the bait and switch routines executed by unethical car dealers. At least with those scams you still get a car. The only issue in that situation; you just get to spend more money for a different car than you wanted. The bait and switch with foreclosure scams involves signing away the ownership of your home.

The scammers will tell the victim that they are signing documents for a new loan that will solve their problems. In reality, they are signing forged documents that will give the crooks ownership of the home. To make matters worse, the victim will still owe for the mortgage but will no longer have the asset.

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