With mortgage delinquencies going through the roof in recent times, scam artists are coming out of the woodworks in droves. In this blog post we will highlight how to identify and avoid some of the common loan delinquency avoidance scams.
Run as far as you can if you encounter any of these red flag situations:
A person or organization guarantees avoiding foreclosure and seeks upfront payment from you to discuss the specifics. The payment they ask may be in the range of one thousand to five thousand dollars and they may have a compelling dog and pony show to make you a believer. No one can guarantee stopping foreclosure proceedings, especially without performing an in depth analysis of your personal situation. Just remember that these scamsters will disappear as soon as they get your money, and they will never talk to a lender.
These sleaze bags claim to have the magic formula for stopping foreclosures dead in their tracks. Of course they will not talk to you without an upfront credit card number from you. They will then charge you for the initial consultation, phone calls and paperwork to get general information which you could have done on your own. Their objective is to lull you into a false sense of trust and security and prevent you from seeking qualified help. They will end up with your money and you will be left with huge credit card bills and an imminent foreclosure.
A person or organization, that asks you to pay them instead of your mortgage lender.
Again, these are unscrupulous criminals whose only agenda is to rip you off and fill up their pockets. Many scam artists create attractive flyers, fake testimonials and impressive credentials to convince their credibility to you. Just tell them you believe in researching everything thoroughly before making a decision…and you will perhaps never hear from them again. Here’s how this scam works:
Let’s say you put your house on the market because you are finding it difficult to make payments anymore. A potential buyer approaches you and offers to pay the full price you are asking and even promises to help you avoid foreclosure. But there is a catch. You are required to deed your property to this buyer and you must also move out immediately. What happens next is this so called buyer simply pockets the monthly mortgage payments you are giving him instead of sending it to your lender. The lender will eventually foreclose on you and you will be left wondering what happened because you were not in your house to read and act upon the bank’s foreclosure notices.
Another variation of this scam is where the so called buyer promises to bring the mortgage current. He will even let you stay in the home, provided you transfer ownership to him. Again, no payments are made by him to your lender and you will soon receive an eviction notice.
A third variant is the “rent or buy it back” offer in which just like the previous two cases, you are required to transfer ownership to this scheming buyer, with the understanding that you will be renting the house from him for an amount that’s lower than your monthly mortgage payment, with an option to let you buy it back from him in the near future. The end result is no different.
Fake counseling agencies
Some online companies with nice websites may convince you they are legit counseling agencies and bait you into giving them your personal information. To ensure that you give them your credit card, they will throw in many freebies such as a free 20 minute consultation to analyze your personal situation (which according to them is a $500 value!), a promise to cut a deal with your lender to lower your interest rate, or negotiate a lower monthly payment plan, etc., which by the way are things you can do on your own without spending a penny.
To avoid becoming a victim to any of these scams, do not give any personal information, credit card number or a check upfront to any individual or company without asking them for sending details in writing. Then call the Better Business Bureau (www.bbb.org) or your local consumer advocates to verify their authenticity. Most reputable businesses do not use pressure tactics to get your business, or make lofty promises. A prudent thing to do would be to first call your lender or an authentic non-profit credit counseling agency that does not require you to cough up upfront money or your credit card number. You could also contact a licensed professional real estate firm like Coldwell Banker Ackley Realty.
A heightened awareness of foreclosure prevention scams and proactive vigilance is the only way to combat this growing menace. Just remember that if anything sounds too good to be true, it probably is!
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