Foreclosure con artists take advantage of people who have fallen behind on their mortgages and face foreclosure. Con artists know that people in these situations are vulnerable and likely to be desperate. Potential victims are easy to find: mortgage lenders publish notices before foreclosing on homes. After reading such notices, con artists approach their targets in person, by mail, over the telephone, or by e-mail. They advertise their services on Web sites or publications. They often refer to themselves with titles that sound official, such as “foreclosure consultant” or “mortgage consultant,” and market themselves as a “foreclosure service” or “foreclosure rescue agency.”
Your mortgage lender – or any legitimate financial counselor – can help you find real options to avoid foreclosure. If someone offers to negotiate with your lender and offers to arrange to stop or delay foreclosure for a fee, carefully check his or her credentials, reputation, and experience. To protect yourself, follow the recommendations contained in this Consumer Advisory.
WATCH OUT FOR FORECLOSURE RESCUE SCAMS
Signing over the deed gives the con artist the power to evict you, raise your rent, sell the house, or steal the equity you have in your home. You will still be responsible for your mortgage, so if the con artist stops paying it, your lender would have the right to foreclose on your home, and the foreclosure and any other problems would go on your credit record.
Bankruptcy laws provide important protections to consumers. Scams can only temporarily delay foreclosure, and they may keep you from using bankruptcy laws legitimately to address your financial problems. Signing over ownership of your home, or even partial ownership, can result in serious financial harm.
HOW TO PROTECT YOURSELF FROM SCAMS
- Know what you are signing. Read and understand every document you sign. If a document is too complex, seek advice from a lawyer or an approved, trusted financial counselor. Never sign documents with blank spaces that can be filled in later. Never sign a document that contains errors or false statements, even if someone promises to correct them later.
- Get promises in writing. Oral promises and agreements relating to your home are usually not legally binding. Protect your rights with a written document or contract signed by the person making the promise. Keep copies of all contracts you sign.
- Make your mortgage payments directly to your lender or the mortgage servicer. Do not trust anyone else to make mortgage payments for you.
- Be very careful about signing over your deed. Foreclosure scams often require you to sign over ownership of your home to a con artist or another third party. Never sign over your deed without getting the advice of your own lawyer, financial advisor, or other independent person that you know you can trust. Understand the terms of the deal you are making. By signing over your deed, you lose your rights to your home and any equity built up in the home.
- Report suspicious activity to the Federal Trade Commission and to your state and local consumer protection agencies. Reporting con artists and suspicious schemes helps prevent others from becoming victims.
HOW TO FIND LEGITIMATE HELP FOR YOUR FINANCIAL PROBLEMS
Contact your mortgage lender or mortgage servicer as soon as you think you are unable to make your mortgage payment. Lenders are often in the best position to help, especially if you are current on your loan or not seriously late on your payments. Your mortgage lender or mortgage servicer may be able to identify options to help you bring the loan current or to modify your loan.
Contact a legitimate housing or financial counselor to help you work through your financial problems. To find one:
□ Call (800) 569-4287, or visit www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm to find counselors approved by the U.S. Department of Housing and Urban Development (HUD).
□ Call the Homeownership Preservation Foundation at (888) 995-HOPE, or visit http://www.995hope.org/, to reach a nonprofit, HUD-approved counselor through HOPE NOW, a cooperative effort of mortgage counselors and lenders to assist homeowners.
Visit the following Web sites for information:
□ NeighborWorks America, www.nw.org/network/home.asp.
□ Federal Trade Commission, www.ftc.gov/bcp/edu/pubs/consumer/homes/rea04.shtm.
If you have a complaint or question involving a national bank and cannot resolve it directly with the bank, contact the OCC’s Customer Assistance Group by calling (800) 613-6743, by e-mailing firstname.lastname@example.org, or by visiting http://www.helpwithmybank.gov/.
Finally, if you are just not certain about where to start, contact me. I can assist and direct you.