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Falling Behind On Your Mortgage

Falling behind on your mortgage can be frightening. Unanticipated financial difficulties leave many homeowners living with the real possibility of losing their home. 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, many unscrupulous companies and individuals are ready to pounce on homeowners who find themselves in distress. Foreclosure predators go by many names. Foreclosure consultants and foreclosure specialists promise to help you in your hours of need, but if you’re not careful, they swill 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 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.

Be aware of the types of scams these predators perform. 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 out of foreclosure, or help you sell your home if that is the best option for you.

Common scams include:

Loan Flipping

An unscrupulous lender offers to refinance your loan, and offer cash when you refinance. As soon as you start making payments, the lender will persuade you to refinance yet again. The lender offers 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 included in the loan, but you are paying additional points and lender fees for managing the refinance. Higher interest rates and pre-payment penalties can apply as well. Repetitive financing leads 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. Never divulge 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 will  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.

Fraudulent Counselors

Counseling services are common tools in the scam artist arsenal. An company that specializes in foreclosure counseling will offer to assist you in your foreclosure. They may offer to negotiate your foreclosure with your lender, advise you about bankruptcy, or offer intermediary services. 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

Remember, if you’re falling behind on your mortgage, you have options. Programs are available to help distressed homeowners. Many can be utilized with little or no money from you. There are good people in your community who can help you, you can avoid foreclosure and keep your home.  But if your circumstances have changed and you’re falling behind on your mortgage, property investors and real estate agents can advise you on your best 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.

Your time is limited when you’ve missed payments, but you do have time to review your options. Take your time, talk to professionals who are trained to help, and contact your local authorities if you feel you’ve been the victim of a foreclosure scam.