If you have struggled to pay your mortgage and are facing foreclosure, you may be wondering if you have any other options. This may make you more susceptible to those offering a way out.
Although these individuals or companies may seem to have your best interest in mind, most of them are trying to scam you out of money and your house. To protect yourself, be aware of some of the common foreclosure scams.
The Federal Deposit Insurance Corporation warns that, in regard to foreclosure help offers, “if it’s too good to be true, it probably is.” Some common foreclosure scams include:
- Refinance: They offer to refinance the mortgage, but the loan documents are actually deed transfer documents. By signing them, you are turning over ownership to the scammer.
- Repurchase or lease-back: A company promises to pay off the mortgage and sometimes other debt in exchange of you “temporarily” signing over the deed to the property. Once this occurs, the new owner can evict you from the house.
- Phantom help: Someone acts as a foreclosure counselor and charges outrageously high fees for very little assistance that does nothing to help save your home.
Where to get foreclosure help
The USA government lists legitimate foreclosure counselors that offer real assistance for little to no money. It also offers advice to avoid becoming a scam victim. Never send money to anyone other than your mortgage lender, do not sign legal paperwork without a review by an independent expert and do not stop making mortgage payments.
How to report scams
If you suspect a foreclosure scam, or if you are a victim of one, you can file a complaint with the Federal Trade Commission. If there is also an involvement of bankruptcy, a local U.S. Trustee office can help.