Foreclosure Rescue Scams - What They Are and How to Avoid Them

Written by: Margery Ellen Golant

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We are seeing an enormous number of scam artists who are out to take advantage of the desperation of people having trouble with their mortgages, or who are in foreclosure. There are ways to tell who they are and how to avoid them, so that you won't be a victim of these unethical con artists.

Did They Contact You ?

Our clients tell us they are receiving mail, email, phone calls, even people ringing their doorbell, with offers to "help" them. If you have been contacted through any of these means, that should immediately make you suspicious. Legitimate consumer attorneys do not bombard borrowers with any of these attempts at communications. Unfortunately, there are many businesses that exist for the purpose of taking advantage of the fear and desperation of people in mortgage trouble. Some will offer to buy your house, either from you or your lender, and rent it back to you. Some will offer to "negotiate" for you with your lender. Some will offer to lend you money to cure your default, or other kinds of "help". Be assured that none of these individuals are doing this to help you - they want to make a profit for themselves, and the ways they do that can only harm you, not help you.

What Did the Communication Look Like

Some of the things they send out look like "official" court notices, except that they give you THEIR name, phone number, web site, etc. Some are made to look innocent and informal. I have one here that is made to look like a handwritten note on yellow lined paper,, complete with smudges. Some look like telegrams, some look like checks. NONE of these are legitimate. No court would send you a notice with the name of any agency to contact, except the local county bar association, court clerk, or local non-profit legal aid agency. Anything that looks like this is a scam. The handwritten note on yellow lined paper was really printed on a printing press, and is sent out by a company who makes its money by getting YOUR house.

Did You See or Hear an Ad ?

Some of these exploiters have glossy, professional-seeming ads on the TV, radio, website, billboard or other media. They promise miracles, guarantee results and money-back guarantees, offer too good to be true financial terms. BEWARE. Any person or entity that guarantees results or promises results is lying to you, since there is no legitimate way they can make such promises. Many of them are, or are related to, the SAME mortgage brokers who got you into trouble in the first place !

Can I Help Myself and File My Own Response ?

That is VERY dangerous. If you have received a summons, that means your lender has commenced an mortgage foreclosure lawsuit against you. No matter how well intentioned, even if it is the Clerk of Court, no one can help you to know what to say in order to do this properly. In order for a response to have an benefit to you, it needs to be legally sufficient. That means it needs to raise legal issues that are appropriate to your case, and which also raise issues which are within the court's power to decide. When homeowners try to do this, they make the process easier for the lender, because they generally wind up admitting that they owe the money, and beg the court for more time to do a short sale, or a modification with the lender. By definition, these are not issues that the court could involve itself in, even if it wished to. No two cases are exactly alike, and no one but a highly qualified foreclosure defense attorney will know what the right response for you would be.

Is There Any Real Help Available ?

Fortunately, there IS help, but no miracle cures or guarantees. There is a small group of consumer defense attorneys in the US who are knowledgeable in mortgage and foreclosure law and in consumer defense. These attorneys network constantly, to share what they know in order to help one another to help YOU. Properly defending against mortgage foreclosure CAN be done. Even if you are not making your payments, there are often ways to get behind this. If your mortgage was predatory (it was a mortgage that was too large, had terms that were too steep, or for some other reason was one you could never reasonably have been able to pay), if done properly, this can often be raised in defense. If there was bait and switch, inadequate or improper disclosure, these are also issues that can form the basis for a real defense. In those cases, it is no wonder the borrower could not keep paying !

Additional Resources

Don't be a victim of con artists ! Help is out there, but you need to be VERY careful, some of the con artists are very slick and persuasive. Be careful of what you read in the papers or see on TV. In most cases they will tell you to call your lender to see if they will work with you. Unfortunately, most lenders can't do enough to make any real difference, and while you are waiting for their answer, you are losing valuable time. If foreclosure has already been filed, you have a VERY limited time to respond, or your right to do it can be permanently lost.

National Association of Consumer Advocates

Golant & Golant, P.A.

Comments - add comment

Posted 7 months ago.

odat1's Comment: most people who have the web dont need a lawyer 75% of the time for civil matters, criminal things get a lawyer asap. use common sense when dealing with folks who claim to be able to get you out from under a loan, get payoffs or payment reduced, modify terms ect, most likely are going to ask you for one mo. mortgage payment to get you the help they say you need, just hang up, if you send them the $ you have heard the last of them, its a scam. remember that saying " a person who represents themselves has a fool for a client" guess who said that first if your guess was a lawyer looking for a fee you are right. go on line lots of free help there. first thing do not i repeat do not ignore a summons to court. you dont show they win. file a intention to defend not too hard just file a letter with clerk of the court in the juristiction that is on the summons, just write in plain english that you intend to defend as you believe the plaintif case has no merit. you will get your day in court. next thing if your mortgage has been sold once there is a 50% chance there is no origional loan documents if sold more than once it is 100% they are lost. no origional paperwork no loan can be proven. the lost paperwork will buy you some time possibly a year or more. their lawyers will file some papers with court asking to take their word that they do own your loan[ called affidavit of lost or missing loan documents] you now send loan co. with a copy to their attorney a request to have origional loan papers available for your inspection at their lawyers office also if the loan has been sold to them or they have the servicing rights to your loan to present or send to you any information like receipt for their purchase of your loan or a letter giving them the right to collect[ servicing] your payment every mo. if they do not respond and my guess is they wont because they have nothing to send you. make certain you take this letter to you circuit court and give the clerk a copy and have him stamp yours with the clerks seal, very easy to do. make xerox copies to send out and keep orig. for yourself. they have in florida 30 days plus 5 more to respond if they dont now send them a notice to compel along with a copy of the first letter you sent them, get format for notice to compel online from a lawbook store cost about $15.00 just go to lawbooks online and pick one. do not wait till their lawyers have got a hearing to try and convince some judge they realliy did own loan and have really lost this paperwork this document they say they lost or cant find could be worth hundreds of thousands of $ kinda like misplacing a piece of the true cross or the holy grail. these folks were making so many loans they got sloppy did not keep very good records. kinda dumb dont you think. also at the same time you need to file with the court and send to lawyers and plaintif a qualified written request for a record of all monies you have paid or any monies any insurance co. have paid to plaintif, yes they do have insurance incase you dont pay loan. AIG sold this kind of policy to many loan co and investment groups. most loans are bundled in a package of 100 to 1000 loans and are sold on wall st. just like pork bellies and oil. after you do all this these people are ready to talk about loan modification. remember investing in loan bundles is just like playing in a big a very big casino, has anyone ever got all the money they lost on their last trip to vegas back because the casino felt bad because you were in big trouble with your spouse for loosing the kids college money at blackjack. i dont think so. the investors and mortgage co took risks and now they want you to give them all the $ they lost. housing prices have droped 40 to 60 % across the nation, the investors and loan co have to understand they must bear the same risks as the homeowner does and they must understand they lost money because they bet on the wrong horse they have to share the loss with us.