What Is a Foreclosure “Rescue” Scam

If you are facing foreclosure or worried about the security of your upside down mortgage, it’s understandable that you might feel desperate. There are hundreds, thousands of companies and individuals offering to save the day and keep you out of foreclosure or restore your financial security. Don’t let your fear and desperation cause you to make bad choices. Unethical people are seizing on the emotions of people in danger of losing their homes and you do not want to be a victim.

There are several different foreclosure rescue scams to be vigilant against. If a broker or a company promises to keep you out of foreclosure, you should automatically be suspicious. No third party can prevent a bank from foreclosing on your home. What happens to your property is between you and your lender. Only the financial institution that holds your mortgage can decide whether or not to foreclose when you fall behind on your payments or default on your mortgage. Be on the lookout for unrealistic promises. Anyone who pledges to keep you out of foreclosure is probably a scam artist. There are good and ethical organizations that are available to offer you assistance; however they know that the final decision rests with the bank.

Another red flag is when a company asks for money up front. If you are required to pay a large sum of money in order to “save” yourself from foreclosure or keep your home, you better find out what exactly you are paying for. When someone asks for money from you in order to negotiate with your lender, you might want to think about doing those negotiations yourself. Any bank or lender will hesitate to talk to anyone other than their customers. Paying someone else hundreds or thousands of dollars to do what you can do yourself is silly. Plus, there are no guarantees. You might pay someone what they ask and then never hear from them again.

Make sure you do not turn over your title or the deed to your house. If you are having financial problems, a scam might look like someone offering to buy the house from you, and then rent it back. They will explain it as a way to keep you in your house, until you can get back on stable financial footing. However, when you sign over the deed or the title of your home, you no longer have any rights to it at all. There is no guarantee that you will ever get it back, and you can find yourself a lot worse off financially.

Instead of talking to unethical and possibly illegal companies, take charge of your own foreclosure situation. If you are behind on your mortgage, start talking to your lender. There might be options available that you have not explored yet. If you need help, talk to a reputable foreclosure attorney, or get help from a charitable organization that does not ask for anything in return. Protect yourself from becoming a victim of a foreclosure scam. If you think you have been a victim, contact the attorney general in your state immediately.

 This post was written for Gabe Sanders, Stuart Florida real estate by Stephen K Hachey. Stephen is an Orlando Short Sale Lawyer specializing in loan modifications, short sales, foreclosure and much more. He is also the owner of his own practice, the Law Offices of Stephen Hachey, PA. This article is for general informational purposes only and does not establish an attorney-client relationship. Please contact a licensed attorney in your state of residence.