Guest blog post
By Sarah Parr
Foreclosure
rescue scam artists are some of the most heartless “businessmen” in the United
States today. They entice desperate homeowners who fear losing their home with
encouraging words and promised results, then run off with their money, their
home or worse, both. Scam artists may look through foreclosure notices posted
in public media and target clients from areas known as centers of foreclosure
activity. They use common and widespread advertising methods to attract clients:
fliers, radio ads, billboards, etc.
Foreclosure
rescue and mortgage relief scams have proliferated in recent years, with an estimate of billions of
dollars lost. There are three general schemes to look out for that could signal
a foreclosure rescue or mortgage relief scam.
Upfront costs
Consumers
often report unethical companies that charge clients for access to government
programs and housing counseling. Qualification of specific government programs
that aid in the loan modification process or foreclosure defense is free. It is
also free to speak with a government agency-approved housing counselor, according
to PreventLoanScams.org. Information on the latest government program or
agency-licensed housing counseling can be found easily on the Internet.
Additionally, a company could be fraudulent if it asks for a large amount of
money upfront for access to the latest government program or a recent mortgage
settlement. Homeowners should also watch out for companies that advise
homeowners to pay mortgages to them and not to the loan provider.
Promise of definite results
Aid against foreclosure or the reasonable modification of a
loan is never guaranteed, and access to specific government programs may only
be available for certain borrowers. Alas, scam artists will do anything to
convince consumers that loan modifications and foreclosure defense carried out
by their company are guaranteed. A scam artist will almost always pose as a
member of a fake organization licensed by, or affiliated with, the government
and claim that a homeowner qualifies for a specific government program that
aids in homeowner relief.
So-called professionalism
Scam artists
will try any scheme to appear authentic and reliable. Non-attorneys often pose
as attorneys from law firms that only offer loan modification services, reports the New York Times. Some law firms even disguise as
non-profit groups that offer loan workouts or forensic loan audits. Consumers
should be distrustful of these lawyers, especially because most law firms
provide loan modifications as one of many services and loan workouts and audits
have been proven useless.
Another kind
of phony professional, in a “bait and switch” tactic, may convince a client to quickly
sign paperwork that signs their rights to their house away and gives them to
the scam artist. Others act generous and suggest the owner sign away the house,
but stay in it until he or she has recovered financially. They will reassure
the former homeowner that he or she will be able to reclaim the house once he
or she has improved money-wise. However, the scam artist will be able to evict
the victims and claim the home.
People on
the verge of losing their home should be cautious of the common schemes covered
above. Also, homeowners who would like a loan modification or who are at risk
of foreclosure should never avoid any communication from their lender. Free housing
counseling is provided by government agency-certified housing counseling
agencies, or by contacting the Homeowners’ HOPE Hotline.
