Foreclosure Scams: How to Avoid Being Ripped Off by “Foreclosure Rescue” Companies

Share “Foreclosure News the Average Joe Can Use!”

We’ve discussed foreclosure scams on this blog before. But, as stated in yesterday’s post here, the foreclosure crisis is deepening — yet again. Hence, we thought it prudent to revisit this topic, for the wolves are out like never before; preying on unsuspecting homeowners at the most vulnerable time.

So, here we go again . . .

Foreclosure rescue companies aren’t new, but there seems to be more than ever now. For a “nominal fee,” (or some type of percentage arrangement) these companies promise to save your house from foreclosure by working with lenders or buying the house from you, the owner.

Post Continued Below: Get your foreclosure cleanup “Business in a Box” and start this lucrative business right now for 40% Off! Click the box to learn how.

Copyright Violation Notice: If you’re reading this entire post (snippets are fine) on any blog other than, it is stolen content. Scraping content (eg, using software to illegally copy and paste copyrighted content from websites and blogs) is becoming a common practice which affects every site owner. So if you see this content someplace else, please take a quick moment to send an email to [info]at[] (remove brackets, of course) so that we can take the appropriate action. Thank you in advance for your help.


It’s worth noting that foreclosure scams work in several different ways. But, what they all have in common is getting money out of you, a desperate homeowner. How they separate you from your money is where the differences come in. To that end, following are some . . .

Common Signs of Home Foreclosure Rescue Scams

(i) The company asks for high upfront fees before they will help you.

(ii) The “counselors” are not counselors at all, but scam artists simply posing as experts affiliated with local agencies.

(iii) The company dupes the homeowner into signing away his or her house to them.

(iv) The company promises to buy the home and rent it back to the homeowner.

While there are plenty of reputable foreclosure specialists out there, you have to do your research before you hand over your cash. How can you find out if a foreclosure rescue company is just a scam or real foreclosure prevention help?

Questions to Ask and Signs to Look for to Avoid Home Foreclosure Scams

1. Know home loan scam Rule 1. What is it? If the company asks for money upfront, walk away – plain and simple. In #3 below, we give a link to a government-sponsored program – which is free.

You never, ever have to pay someone to help you prevent foreclosure. Remember this. While it’s time consuming, tedious and an outright pain in the patootie, everything the supposed “foreclosure rescue specialists” promise to do for you, you can do for yourself.

2. Check out the BBB (Better Business Bureau) or the FTC (Federal Trade Commission) for reviews.

Note: A newer company may not have any negative claims against them, so still be careful even if there aren’t any complaints against a company.

3. Get reputable foreclosure assistance help. How? By speaking with your local non-profit housing counselors first and ask them about reputable rescue companies.

The link here is to HUD (the Department of Housing and Urban Development, a government agency). It lists approved housing counseling agencies that are available to provide you with the information and assistance you need to avoid foreclosure. And, it’s free. As the notice on the site states:

Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks® America. There is no need to pay a private company for these services.

Simply click on your state from the link above to find one located near you.

4. Consult a foreclosure attorney. Never sign any documents from a foreclosure rescue company without consulting a foreclosure attorney/real estate lawyer – in your jurisdiction — first.

Definitely don’t sign any documents with blank spaces! Make copies of everything and get all agreements in writing.

5. Watch out for people that offer to buy your house and then rent it back to you. This is a common home foreclosure scam. Once you sign over the deed, what usually happens is that your home will be sold to another party for whatever the thieves can get.

So, for example, even if your home is worth $150,000, they may sell it for $50,000 or $75,000. After all, whatever they get for it is pure profit for them. The long and short of it is, they pocket the cash and you’re out of a home.

See the related posts below for more info on how to avoid home foreclosure scams.

Related Posts

Home Loan Modification Scams to Be Aware Of

Foreclosure Lawyer: Need One? How Not to Get Ripped Off & Choose the Best One

Home Foreclosure Scams: Attorney General Cracks Down on Firms Preying on Desperate Homeowners Facing Foreclosure

Home Foreclosure Scams: Foreclosure Consultants — Beware!

Foreclosure Prevention Scams: Loan Modifications Specialists Facing Jail Time

Home Foreclosures to Blame for Rising Cost of Rents and Increase in Foreclosure Rental Scams on Popular Sites Like Craigslist

Cleaning Foreclosures: Scams to Be Aware Of

P.S.: Like this post? Follow Foreclosure Business News on Twitter.

Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

No Comments

Comments are closed.