Be on the Lookout for Foreclosure Scams

Most of the time, homeowners who are facing foreclosure are caught up in unanticipated financial problems, such as sickness, losing a job, divorce, legal problems, death in the family and other factors that may affect a homeowner’s ability to pay his or her monthly mortgage payment. Since foreclosure only occurs when a homeowner falls behind mortgage payments, lenders will only repossess a home when no financial arrangements or negotiations have been made.

Unfortunately, if you’re dealing with foreclosure, you are more exposed to various fraudulent foreclosure-related agencies, which call themselves foreclosure specialists or consultants, who are always on the lookout for desperate homeowners to prey on during their unfortunate financial problems.

Be aware that every time a lender files foreclosure notices with the public trustee, the local newspaper or county courthouse will advertise these repossessed homes. This is the most common way these fraudulent companies find desperate homeowners. Therefore, as soon as one of these agencies reach you through phone, mail and visits, check with the Department of Housing and Urban Development before opting for their services or consultation. Here are common foreclosure scams made by so-called foreclosure experts:

• Fake Foreclosure Counseling Agencies – When you are having trouble with your mortgages, many experts suggest seeking advice of a professional. Unfortunately, fake counseling agencies may offer consultation for a large fee. Not only does the agency overprice consultation fees, all they do is make a phone call and complete some paperwork, which you could have done yourself in less than 30 minutes without the extra cost. Although some of these agencies may negotiate with your lender to arrive at a repayment plan, most of them will mislead you and prevent you from seeking for real help.
• Lending Scam – When a person pretends to be a lender and act as if they are there to rescue your home from foreclosure, they will suggest refinancing your loan with a lower mortgage payment. Although your mortgage payment will be low in the first few months, you’ll be shocked to find out in the end of your term that the total amount you have borrowed is still due in a lump sum balloon payment. When this happens, your only choice is to pay for the entire balloon payment or allow the lender to repossess your home.

Understand that predators that are aware about your soon-to-be repo home will come and attack you with bogus offers that could convince you just to save your home for foreclosure. While most of these scams are done by contacting you personally, some con lenders also scatter around the Internet. If you feel that an offer, repayment plan or loan is too good to be true, then don’t just go with it. You can always save your property by negotiating with your lender and seeking for a more appropriate solution to keep your home for being repossessed.