Unanticipated financial difficulties leave many homeowners struggling to avoid foreclosure. Losing your job, divorce, a death in the family, and unexpected medical bills are real issues that put families in financial peril every day.
Unfortunately, there are many unscrupulous companies and individuals who are ready to pounce on homeowners who find themselves in distress. Foreclosure consultants and foreclosure specialists may promise to help you in your hours of need, but if you’re not careful, they can swindle you out of your home, equity, and cash.
When you fall behind on your mortgage, your lender is required to post a public notice of their intent to foreclose. Scam artists scour local newspapers, looking for distressed homeowners. These companies will attempt to contact you by phone, mail, or personally by knocking on your door. Beware of all unsolicited callers. While there are legitimate companies who can help you, make sure you always do your due diligence. Do not offer any personal information to anyone before you have verified their credentials.
If you believe that you have been the victim of a foreclosure predator, contact your local police department. Talk to your bank, real estate agent, property investor, or attorney for additional advice. These professionals can provide aid to help you avoid foreclosure, or help you sell your home if that is the best option for you.
Common scams from foreclosure predators include:
An unscrupulous lender offers to refinance your loan, and offer cash when you refinance. As soon as you start making payments, the lender tries to persuade you to refinance yet again. The lender may offer more cash for home remodeling, or personal use, such as to use to pay off other debts. Every time that you refinance, you incur additional fees to do so. You may not “feel” it as it’s including in the loan, but you are paying additional points and lender fees for managing the refinance. Higher interest may apply, as well as pre-payment penalties may apply as well. Repetitive financing may lead you deeper in debt and closer to foreclosure.
Internet & Phone Scams
Be wary of anyone who contacts you via phone or email with an offer for low mortgage financing. Do not divulge any personal information, such as your social security number, date of birth, or bank account information to anyone you don’t know. Scams are conducted by obtaining personal information from you and then immediately accepting your loan application. At this point, the predator will start requesting confidential information from you to process and finalize the loan. They may even request that you transfer money to them for earnest money, pre-paid points, or other fees. These actions put you at risk for identity theft, as well as potential theft of your bank accounts.
You may be contacted by individuals who will offer you counseling services. These services may include negotiating your foreclosure with your lender, advise you in a case of bankruptcy, or offer to act as an intermediary with your bank. Some may even say they represent a government agency or that they can perform a mortgage audit to make sure that your lender has abided by the terms of your mortgage. These “services” come with exorbitant fees. Even worse, the homeowner loses valuable time working with these fraudulent counselors and by the time you realize you’ve been scammed, you may be too late to help resolve your foreclosure. You can obtain loan counseling consultation from many organizations with little or no fee. You can check with your lender for these services, as well as local realtors and property investors.
The Bottom Line
You have options to avoid foreclosure. There are many programs available to help distressed homeowners and you can access many with little or no money. There are good people in your community who can help you. You can avoid foreclosure and keep your home, and if you’re ready to sell, property investors and real estate agents can advise you on your options.
Stay in touch with your mortgage lender. It may seem frightening, but bankers are experienced in these issues, and they really do not want to take your home. It’s in their best interest for you to pay for your home, so contact them and ask for a private meeting with a mortgage officer.