Homeowners Beware of Foreclosure Cons

Realizing that you're facing foreclosure on your home may be the most trying and traumatizing time of your life.

Don't aggravate the situation by becoming the victim of a scam perpetuated by slippery con artists who take advantage of your desperation and fear. They do this by promising to help you save your home, but what their really doing is helping themselves to any money that you may have.
Some of the cons being enacted on homeowners that are dealing with foreclosure involve scammers who request upfront fees for their assistance. In one variation, the property owner is assured that the scammer can communicate with the lender or mortgage holder more effectively than the homeowner.

In return, the homeowners agree to render a relatively small fee or fees, typically about the amount of a mortgage payment, to the company or individual.

It all appears to be a great situation till the lender continues to call and no deals are ever forthcoming.

Then the property owners conclude that their "savior" has disappeared, along with their fees.
In another variance of this scam, the company or individual again claims to have a rapport with the lender. In addition to some nominal fees, the homeowner is told to make their monthly mortgage payments via this new company.

A few months may go by before the scammed owner becomes aware that no payments are actually making it to their lenders.

These con artists steal multiple months of payments, and the property owners are further behind and in much worse condition for having dealt with them.
In yet more instances, homeowners approaching pre-foreclosure or days away from foreclosure are contacted by members of a company that offers to help them save their home. The scammers offer to supply the desperate homeowners the sum of money they are indebted to their current lenders in order to suspend the sale of their property.

In one version of this scam, the company gives the loan at just less than the allowable limit for interest rates and service fees. Homeowners who were already experiencing difficulty with their loan now find that they must make even greater payments or endure even higher penalties.
More audacious scammers take the deal even further. They execute a swindle called equity stripping. This means that they search for troubled homeowners who owe under half of the value of the real estate.

Then, they approach the homeowners with a proposal to loan the money, again at egregiously high rates.

If the homeowners start to have problems paying, they offer to forgive and again make them another loan. In each instance, the administrative fees get added on to the loan and the interest rates increase.

After a time, the homeowner still loses the house, however they no longer have near the equity they once did.
Many of the rest of the foreclosure scams involve "misunderstandings" by the homeowners. The con artist will materialize at the last minute and make lots of promises.

Once the contracts are finalized, the former homeowners find that the contract they were led to believe would save their home was really signing it away.

Even more disheartening, they may still be under the mortgage payments they were trying to escape. Many variations on this theme exist and desperate homeowners must remember to take care to avoid these scams.
No matter how hopeless your situation may look, always take care when dealing with contractual agreements.

If you don't understand what the document entails, have an attorney examine the papers. Do not trust any promises that are verbal! These are not lawfully binding.

Do not sign a contract that has blanks or has not been completely filled out. Remember, if your first language isn't English, use your own interpreter.

Do not use an interpreter provided by the company. Finally, you know your mother's advice was accurate: if it sounds too good to be true, it probably is.