Buyer Beware

Foreclosure Scams Up 60%

The Homeownership Preservation Foundation, a nonprofit that helps homewoners navigate financial challenges and avoid foreclosure, announced on April 11th that foreclosure scams have jumped nearly 60%.

Two Types of Scams

There are two types of scams these deadbeats will try to run on you: advance-fee loan modification and sale-leaseback. In the advance-fee loan modification scam, the scammer will ask the target to pay ahead of time for a promised guaranteed loan modification. In the sale-leaseback, the scammer convinces the target to turn over the home's title in a promise to rent the house and buy it back in a few years.

Warning Signs Your'e Being Scammed

• A person asks for a fee in advance to work with your lender to modify, refinance, or reinstate your mortgage. In addition to such fees being prohibited by the FTC, the person asking for one will likely take your money without performing any of the services.
• A person guarantees he or she can stop a foreclosure or get your loan modified. No one other than your lender can guarantee he can stop foreclosure or modify your loan.
• A person advises you to stop paying your mortgage company and pay him or her instead. Under no circumstance should you ever send a mortgage payment to anyone other than your mortgage lender.
• A person pressures you to sign over the title to your home or sign any paperwork that you haven’t read or don’t fully understand. A legitimate housing advisor will not pressure you to sign a document of any kind. Remember, surrendering the title to your home is one of the two primary ways people get scammed every day!
• A person claims to offer “government-approved” or “official government” loan modifications. Scam artists often pretend to be affiliated with the federal government. Be sure to check any third party’s credentials by contacting your mortgage lender.
• A person you don’t know asks you to release personal financial information. Always confirm that you are speaking with a legitimate person by contacting your mortgage lender directly.

Be cautious if you are looking to make a loan modification. Work directly with your lender and be suspicious of any calls or emails trying to dupe you into either one of the scams. Ask for credentials and make sure you are working with just your lender.

The original articles can be found here and here.