If you’re like a record number of Americans, you are having panic attacks because you have a mortgage you can’t afford and the price of your home is not going up enough to bail you out (or maybe the value has gone down which is even worse). Save yourself from additional anxiety – if you get a cold call from someone representing themselves as a foreclosure wet carpet Melbourne consultant or a mortgage consultant specialist, hang up the phone (but after you get his name and phone number).
The foreclosure rescuer will tell you he wants to help you avoid foreclosure, save your home and save your credit. Chances are though, he really wants to get your money or even your home.
foreclosure rescuers will be contacting you as soon as a notice of default has been filed with the county. Notices of default and possible foreclosures are a matter of public record that are published in some newspapers and are also available from “clipping services” that sell the lists to foreclosure consultants. NODs are essentially a shopping list for scammers to use. The scammers determine which homes have equity in them and start cold-calling and mailing letters to the homeowners. If you get a cold call, you probably don’t want to do business with them. However, there are honest real estate investors that truly will help you. All you have to do is find them.
So what are some of these scams? The “foreclosure rescue” scam takes many forms including the straightforward cons where the scammer promises to negotiate with the homeowner’s lender in exchange for one month’s mortgage payment. The scammer then takes the money and runs. Never pay an upfront fee to anyone!
Worse yet is when the homeowner gets conned into letting the foreclosure “rescuer” take over the mortgage payments in exchange for the deed/title to their house. These can often end in disaster, unless you find a reputable real estate investor to work with.
In a lease buyback scam, the scammers say they can save your house from foreclosure if you turn over the title to him for a year or two. During the interim, the homeowner can live in the house, pay rent, and then buy it back in two years (once they have recovered their credit rating and financial situation). But what often happens is that, unknown to the homeowner, the house is sold to an investor; the mortgage payments are not made, the equity is stripped out, and the homeowner gets evicted.
Then there are “debt elimination” scams. The distressed homeowner is informed that he can pay off the mortgage quickly by changing the loan payment terms. The scammers tell the homeowner that there are loopholes in the original loan that make it invalid so the homeowner doesn’t have to pay.
So how does a homeowner protect themselves? First of all, be very wary of anyone asking for an up-front fee; anyone refusing to provide references, anyone wanting you to sign over your title, or asking you to sign forms that have not been completely filled in. Most important of all is to contact your lender and attempt a workout solution with them. Another option is to find an honest and ethical foreclosure rescuer.