Nationwide the number of foreclosures continues to increase, and so are the opportunities for foreclosure rescue scams. Should you ever find yourself facing foreclosure you should be on the lookout for these foreclosure scams. Falling victim to a foreclosure scam is the last thing you'd want to do to yourself. So how do you know if you are being scammed? This article should give you an idea of how it might look if you were approached by a scammer.
What exactly is a foreclosure rescue scam?
In order to spot a scam, you'll first need to know what a scam is. A foreclosure scam is made up of a few things: you, your home, and a person approaching you in person or via mail who says wants to help you. This person will want to save your home by getting you out of foreclosure through their services.
Here's what can end up happening if it's in fact a scam. If you have equity in your house, you can lose the equity. You might also end up paying a lot of money to get your situation straightened out. Another turnout could be that you'd be forced to move out after completely losing your home to the person that promised to "help" you. And once you've found out that you have been scammed, you'll have little or no time left to work things out with your mortgage lender.
How Do I Know If I Am Being Scammed?
Picture this. You have fallen behind on your home mortgage payments by a couple of months. You receive a letter in the mail from your mortgage lender informing you that they've started the foreclosure process. You get a phone call shortly after that, or someone shows up at your front door, or you get a letter in the mail from a rescuer. This rescuer claims to be able to stop your foreclosure with a phone call. The rescuer offers to purchase your home, and they might tell you that you have alternatives. They might even offer to get you some cash to help you pay your debt. The rescuer might ask you to sign over your deed. Typically, they'll present themselves as insistent and a little hurried to get you to meet with them because time is crucial. The rescuer will try to show you that they care about you and your situation.
Let's say that you do decide to meet with them. In your meeting with them they promise you a "fresh start", a "chance to start over", or a "new beginning." Because you need to hear some positive words about your situation, you might actually begin to feel a sense of relief. The rescuer might even use some testimonials from folks that they supposedly have already saved. They may or may not be legitimate ones, but just keep in mind that every situation is unique and that foreclosure bailouts don't work for everyone.
During the initial stages of working with rescuer, it is very possible that they tell you to not talk to any lawyers, or the mortgage lender to let the rescuer to handle all the negotiations. While this might feel as relief to yourself, what you probably don't realize is that it sends a bad message to your mortgage lender. It tells them that you are no longer willing to try to work things out. This will likely end up in disallowing you to refinance or work out a plan with your lender.
If you're a victim to a foreclosure scam, sooner or later you will notice that you are not achieving anything using the rescuer. Unfortunately, by that time, it'll likely be too late for you to work things out. Depending on the type of scam, either you'll lose your house to the rescuer, or you'll lose your house to a foreclosure process. You will most likely be out a significant amount of money and equity in either scenario. Tragically, at the end of all of this you'll be left with severely damaged credit, having to find a new place to live, stress, and the frustration caused by the loss of your home to a scam.
Not all rescue services are bad aiming to rip you off. If you have any questions about any individual who approaches you, you can check with the Better Business Bureau, your state Attorney General's office, and your state's Department of Banking. As a rule, always make sure to seek a second opinion and research the company out with any of the agencies mentioned before signing any document for a rescue program.
