Foreclosure scams are very much on the rise in an era where more borrowers than ever need some form of foreclosure prevention, mortgage relief, or other options to save their homes during times of financial uncertainty.
Fortunately, many of these scams have some tell-tale warning signs you can use to avoid getting conned. The federal government warns consumers to watch out for the indicators that a scammer is at work instead of a legitimate offer of help.
The Federal Trade Commission warns home owners to stay vigilant, especially when the following signs are present from any business which:
- offers to provide the homeowner with a loan modification regardless of circumstances;
- tries to get you to do an end-run around your current lender and asks you not to contact the lender, lawyer, or housing counselor;
- tries to sell you on the idea that all or most of its customers get loan modifications or mortgage relief.
There are other warnings–have you been approached by someone asking you for an upfront fee before any services are rendered? Unless the person asking is a legitimate lawyer you have vetted yourself, don’t agree to pay. The same goes for ANYONE who tries to restrict your payment options to cashier’s checks or wire transfers. Never agree to this.
The FTC also wants consumers to know that any third party offering to rent you your own home so you can “buy it back over time” is a scammer and should be reported to the federal government. The same goes for anyone who wants you to send your mortgage payments to THEM instead of your lender.
Never agree to do this. Ever.
The FTC advises ALL borrowers to contact the lender directly in times of financial trouble to make arrangements. Do not seek third parties instead of your lender if you need to regnegotiate a new payment schedule, get mortgage relief, etc. Ask the lender about loan forbearance, loan modification, refinance, etc.
But act as soon as possible as your options get more limited the more payments you miss. Yes, it can be intimidating to reach out to your lender after multiple payments have been missed and you may feel afraid to make the call–but making that call is your first step toward saving your home and preventing the foreclosure process from starting.
Don’t delay in contacting your lender for best results. But do contact the lender even if there HAS been a delay–your best hope to save the home starts with that phone call.