Beware Of Free Foreclosure Help Scams

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Beware of free foreclosure help scams, because scam artists follow the news headlines. They are aware of homeowners falling behind on their mortgage payments or at risk for foreclosure. They have very catchy pitches that may sound like a way for you to get out from under, but their intentions are much different. They are preying on consumers in need of financial help in attempt to take their money.


There are several different scams that these predators use to try to take your money.

The first one is "The foreclosure prevention specialist" scam. The specialist really is just a fake counselor who charges large fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for them self. None of the actions results in saving the home. This scam gives homeowners a false sense of hope, delays them from seeking qualified help, and exposes their personal financial information to a fraudster.

The second free foreclosure help scam is the "The lease/buy back" scam. The scam artist deceives homeowners into signing over the deed to their home to a scam artist who tells them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, the homeowner gets evicted, and the “rescuer” walks off with most or all of the equity.

Finally, there is "The bait and switch" scam. They con homeowners into thinking they are signing documents to bring the mortgage current. Instead, they are signing over the deed to their home. Homeowners usually don’t know they’ve been scammed until they get an eviction notice.

You don’t have to go through the foreclosure prevention process alone. A counselor with a housing counseling agency can assess your situation, answer your questions, go over your options, prioritize your debts, and help you prepare for discussions with your loan servicer. Housing counseling services usually are free or low cost. While some agencies limit their counseling services to homeowners with FHA mortgages, many others offer free help to any homeowner who is having trouble making mortgage payments. Call the local office of the U.S. Department of Housing and Urban Development (www.hud.gov) or the housing authority in your state, city, or county for help in finding a legitimate housing counseling agency nearby. Or consider contacting the Neighbor Works® Center for Foreclosure Solutions at 888-995-HOPE or www.nw.org. The Center is an initiative of Neighbor Works America.

This information is provided and is a warning to consumers by the FTC or Federal Trade Commission. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.

You may want to also read Stopping A Foreclosure On A Home

Although all information has been written in good faith and reviewed, please email us at [email protected] to report any inaccuracies.