Any crisis breeds opportunity for scams. Desperate people lose their objectivity and act irrationally. The ongoing mortgage crisis is now spawning a new wave of opportunistic scams to swoop in on desperate homeowners through bogus 'foreclosure rescue' schemes. Look for these warning signs:
1
Large Upfront Fees
These scams want their money upfront so they can quickly move on to the next victim. Avoid any offer that seeks payment of fees before the full service is rendered. Reputable professionals or businesses may require that you pay a retainer fee or a portion down but the key is to ensure they are reputable through an independent source or a government agency before paying any money.
Most of these scams charge the same or even more than a licensed attorney would charge to negotiate a modification with your lender. If you are going to invest money in saving your home, do so with a licensed professional.
2
"Foreclosure Rescue" Operation Wants to Limit Your Investigation or Discourages Self-Help
If you are instructed not to talk to the lender, mortgage servicer, attorneys, accountants, etc about your situation beware. An attorney may instruct you to avoid such contact but attorneys are licensed by state boards with extensive ethics rules. Scammers are not, and only seek to isolate you from outside influence until they have your payment. Verify the legitimacy of agency, professional, or businesses through an independent source or a government agency before paying any money.
3
Wants Payment Sent Directly to the Foreclosure Prevention Business
There is little, if any, legitimate reason for the payments to be re-directed to a foreclosure prevention operation. Further, the risk far outweighs any benefit. Avoid any business that seeks your mortgage payment to be sent directly to them. Most likely, they will convert your payment to a payment made for their services, while your mortgage goes unpaid.
4
Wants You to Sign Over Property, Title, Deeds for Any Purpose
Once you transfer title or transfer a deed, you have passed your rights to that property. Do not trust that you will get your property back at a later date.
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