According to the Federal Trade Commission, the agency responsible for preventing fraudulent, unfair and deceptive business practices, foreclosure rescue scams are actually not as difficult to spot since they usually take the following forms:
Bait and Switch: a scam involving the convincing of the distressed homeowner to sign some documents as part of the re-financing plan when in fact it transfers the ownership of your property to them.
Fake Counseling: this involves the scam artist asking you to pay an upfront fee in exchange for negotiating with your lender on your behalf. Of course, you can expect the scam artist to disappear as soon as the fee is paid.
Bankruptcy Filing: instead of negotiating with your lender in exchange for a fee, the scam artists will file for bankruptcy and walk away with the money, leaving you with a bankruptcy entry on your credit record.
Lease to Buy: the troubled borrower will be asked to sign over the ownership of the property but still allow you to stay on as a tenant. An option to buy back the property is given to you as part of the agreement. Unfortunately, buying back the property will be nearly impossible because of the unrealistic terms and you still end up losing your home and money.
In addition to these, homeowners are also warned against rescue companies that:
Prohibit you from contacting your lender or lawyer.
Convince you to pay your mortgage dues to them instead of the lender.
Ask you to transfer the property’s ownership to them.
Promise to stop foreclosure immediately, even without asking about your circumstances.
Pressure you in signing documents without allowing you to read and understand them.
If you think that you involved in a fake foreclosure rescue operation; immediately contact the FTC via their website or dial (800) FTC-HELP.
Leticia Carvalho has been educated in the finer points of the foreclosure market over 5 years.
Notice: In accordance with FTC guidelines, we state that RealEstateProArticles.com has financial relationships with some companies and may be compensated if consumers choose to buy, subscribe or take any action to a product or service via the links on our website. Occasionally, we receive free access to review a product or service. We do not accept compensation in exchange for a positive review. These reviews are strictly the opinions of the author.
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