Beware of Foreclosure Rescue Scams: Help is Free!

In these tough economic times, you may have lost your job and fallen so far behind on your mortgage payments that you fear you home will be foreclosed. 

You are fretting about this, when all of a sudden, you receive a call from a company that promises to help you. Or maybe, as you are trying to channel surf your problems away, you hear an infomercial touting the fact that someone has the answer to your housing woes! They will share it with you, if you just call for free mortgage help. Operators are standing by....  Either way, you feel hopeful that things will work out, and you are very receptive to what the company has to say.

Before you get involved with “help” like this, check out the government site Making Home Affordable. This site was set up after President Obama announced his programs to help avoid foreclosure. Even if the federal program cannot help you, the website offers good advice for staying clear of schemes that will make your situation worse. Not everyone who says they understand your dilemma has your best interest at heart.

Beware of Foreclosure Rescue Scams - Help Is Free!

As the site notes:

• Beware of anyone who asks you to pay a fee in exchange for a counseling service, or modification of a delinquent loan.
• Scam artists often target homeowners who are struggling to meet their mortgage commitment, or anxious to sell their homes. Recognize and avoid common scams.
• Assistance from a HUD-approved housing counselor is FREE.
• Beware of people who pressure you to sign papers immediately, or who try to convince you that they can “save” your home if you sign or transfer the deed to your house.
• Do not sign over the deed to your property to any organization or individual, unless you are working directly with your mortgage company to have your debt forgiven.
• Never make a mortgage payment to anyone other than your mortgage company without their approval.

How the Scammer Programs Work

There are many variations on these scams, but in any case, you usually end up in worse shape.  Foreclosure scams fall into three main categories:

Phantom help: The company promises to contact your lender, which they may or may not do, regardless of what they tell you. They may fill out some basic paperwork you could have completed yourself.

The bailout: The company offers to buy the home and rent it back to you, until you can buy it back. Many times, they pocket what you pay while never dealing with your lender, so you end up with no property and no place to live.

The bait and switch: The company may have you sign documents to make the mortgage current, but actually you are signing over your home.

Free Help Available
Not all companies who charge a fee for mortgage help are scammers, but if you’re at risk of foreclosure, legitimate free help is available from several sources:

The Federal Government through Making Home Affordable.  Even if you do not ultimately qualify for this program, there is plenty of free or very low cost help available from HUD-approved counselors and non-profit groups that will either help you stay in your home, or move on to a new stage in your life. Ironically, since the government started its program, foreclosure scams have actually been on the rise.

The State of Maryland through the HOPE Program.  HOPE (Homeowners Preserving Equity) is committed to helping both owners and renters affected by impending foreclosure. Homeowners can find information about free foreclosure prevention counseling by calling the Maryland HOPE Hotline at 1-877-462-7555, or by visiting their counseling page.  More Myths and Facts about Foreclosure Prevention are revealed on their website.

If you are at risk of losing your home, don’t be scared and don’t be scammed!

Contact me for expert help in buying or selling your home in the DC, MD, or VA areas.