Foreclosure Relief Scams

In the past I've written about loan scams (Beware of Mortgage Tree Lending and Beware of Predatory Lenders) and credit repair scams. Recently, a new scam artist has begun to appear - the "forclosure relief expert". Preying on people who are about to lose their home to foreclosure, these thieves are out to steal your home as well as any savings you may still have. Here's how they work.

You are delinquent in your mortgage payments and are afraid that you are going to lose your home. Suddenly, there is an answer to your prayers. You are offered the services of a "foreclosure relief expert". This offer may appear in the form of a letter in the mail, a flyer at your door, or even a knock at the door. Whatever the form, the offer is the same. By following the "expert's" advice, you will be allowed to remain in the home as a renter. This will give you an opportunity to save some money. And once you get your financial house back in order, you can then buy back the home.

So what's really going on? First, your "expert" will introduced you to an "investor". You will be instructed to deed your home over to this "investor". In exchange, he will pay off your loan and you can remain in the house as his tenant. Of course you'll need to pay him rent.

The "investor" then goes and gets a new loan on the property, pulling out as much equity as possible. You keep mailing him your rent until, one day, you receive a notice to vacate the property. It seems your "investor" has taken any of the remaining equity in the home, converted it to cash, and then defaulted on the loan. This leaves you, as the tenant, out on the street.

These thieves are con artists and very good at gaining the trust of people desperate for help. Here are some warning signs that you are being set up:

The offer of help comes out of the blue - it could be in the form of a phone call, letter, or flyer;

The paperwork is complicated and the explanantions are not clear;

You are asked to sign blank documents or forms with false information.

These are sure signs that you are dealing with a crook. There is an excellent video on You Tube that deals with this topic. If you think you have been approached by or are a victum of a credit scam artist, call the Mortgage Fraud Hotline 1-800-4FRAUD8 (1-800-437-2838).

Losing your home is very stressful, but there are legitimate ways to get help. The best place to start is by talking to your lender. Read Economic Hard Times for some suggestions as to your options. Or call the HOPE National Helpline at 888-995-HOPE. They are open 24 hours and provides free assistance.