Avoiding The Most Common Foreclosure Scams And Fraud

photo by Camera Fraud, Flickr

Being threatened with foreclosure is an anxiety-producing event in your life, and one that will keep you up all night with constant worry. Those who lurk to perform scams and fraud unfortunately abound in these times. Prior to giving into any promises, be sure and perform serious investigative research of not only the company, but also the offer itself. And do remember that if it sounds too good, it probably is fraud!

One type of scam is one that makes you the landlord of the property in question. The shyster promises to pay off the loan threatening you with foreclosure, if you sign a “quit claim deed” to the scammer and he then will rent the property enabling you to collect enough rent to live elsewhere rent-free. He will be the tenant, and he will filter the rent he owes you to the landlord you will rent from.

After a few months of excuses, you find that the “tenant” is gone, the bank is still foreclosing and you’ve signed a worthless deed that has given you no protection against foreclosure at all.  Chances are, your property has been “trashed.” Variations of this scheme can be easily found.

The Middleman Scam

For some reason, people who are facing foreclosure refuse to discuss the problem with the lender.  In walks a person who says that you do not need to visit with your lender all alone, that they will accompany you and act as the middleman for you.  Of course, there’s a very hefty charge for this handholding.

Or, another variation on that scam is that many middlemen say that they will talk to the lender FOR you provided you show good faith and make payments to the middleman who will then provide the payment to the lender.  Of course they never make the payments. There are as many variations on this as there are in music styles.

Confidence Men

Regardless of the name of the scam involved, usually the modus operandi involves the fact that you do not wish to contact the lender, and the scammer is a perfected con man, who gains your confidence and then scams you. There are pressure scams that exhort you to sign something immediately while there’s still time, there are so-called professional counseling agencies that charge exorbitant figures in order to accomplish absolutely nothing.

photo by Quint Cobb Foreclosure Relief, Flickr

Over and over again, people have been warned that they need to visit their lender and see what the lender is willing to do to keep you in the property.  After all they are swamped with foreclosed properties, and do not wish yet another property to try to manage, fix up, rent or sell.  If working with the lender does not produce anything to your satisfaction, turn to a HUD-approved housing counseling agency.  How to be sure it’s a HUD-approved agency?  Again verify it with your lender.

Above all, inform yourself of scams, real counselors, government programs and do make a visit to your lender.  There is a lot of power in correct useful information. Avail yourself of it, for it may save you from a scam someday.