Foreclosure Scams: 5 Things to Look for Before Using Any Company That Promises to Help You Stop Foreclosure
If you’re like many homeowners facing foreclosure, you haven’t a clue as to what to do to stop the foreclosure process. And, when you turn to the internet to find help, you’re inundated with a host of companies — all promising that they can help you stop foreclosure.
Easy does it . . . there are a lot of foreclosure scams out there. AND, there are also a lot of legitimate companies as well who can help you stop foreclosure. Following are five things that can help you avoid foreclosure scams.
Prevent Foreclosure Scams Tip #1: Work with Nonprofits
Preferably a HUD-approved agency. HUD is the U. S. Department of Housing and Urban Development. According to its website, it “. . . provides vital public services through its nationally administered programs. It oversees the Federal Housing Administration (FHA), the largest mortgage insurer in the world, as well as regulates housing industry business.” [Bold emphasis added].
Don’t just take a company’s word that it is HUD approved. Do you due diligence by researching them online. You can visit HUD’s website and conduct an easy search for HUD-approved housing counseling agencies. You can also call. The number is 877-HUD-1515 (877-483-1515).
Remember, if you received solicitations — via mail, phone, email or even in person — check out the person/agency and make sure that they are HUD-approved before you conduct business with them. You will be handing over a lot of sensitive financial information. Your identity can be stolen, your bank accounts may be able to be accessed, etc.
So doing your due diligence is worth it to ensure that you’re doing business with a reputable person/agency/company.
Prevent Foreclosure Scams Tip #2: Don’t Prepay
Many firms will ask for an up-front fee before they will begin working with you. This should be a huge red flag. FYI, many HUD-approved stop foreclosure programs are free; you don’t have to pay a dime. Others are low cost.
The bottom line is, don’t fork over any money before you get help. And certainly don’t use a firm who asks you to pay only via cashier’s check or wire transfer.
One more thing: When you do pay, know exactly what you’re getting for your money.
Prevent Foreclosure Scams Tip #3: Know What You’re Signing
Many foreclosure scam artists get unwitting homeowners to sign over the deed to their properties. They also get them to sign powers of attorney unknowingly. This powerful document allows them to conduct financial business in your name.
It’s soooo easy to sign over the deed to your house or sign a power of attorney. Why/how? As every homeowner knows, you sign a lot of papers when you buy, sell, refinance or modify a mortgage. Hence, one of these documents could easily “slip by you.”
So, pay attention to every document you sign. And, if you don’t understand it, don’t sign it. Period.
Prevent Foreclosure Scams Tip #4: There are No Guarantees
If a company guarantees that they can get you a certain result (eg, lower your payment by 50%, get your loan modified, etc.), run! The lender who holds the note has the ultimate power to decide your “stop foreclosure” outcome.
While working with a “prevent foreclosure” counselor can increase your chances of obtaining a desired result, every reputable counselor will tell you that they can’t guarantee a certain outcome.
Prevent Foreclosure Scams Tip #5: Use Common Sense & Trust Your Gut
If something just doesn’t “feel right in the pit of your stomach,” trust that. If it sounds too good to be true, it most likely is. And, no matter how desperate you may be to stop foreclosure, by going against your instincts, you could be getting yourself into even more financial hot water.
For more information on foreclosure scams, visit the Federal Trade Commission’s webpage on foreclosure rescue scams. Also, report offenders. You can find out how to do this on the Report Federal Citizen Information Center’s Consumer Action Website.
Good luck in not becoming a victim of a foreclosure scam.
Get info on 32 ways to stop foreclosure: Discover what banks won’t tell you & investors don’t want you to know.
P.S.: Buy cheap foreclosures and have a $45/month mortgage — really!
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Learn more about how to stop foreclosure scams in the video below.
Copyright © 2009 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.