Con artists are out to get
you and your home by promising to save you from foreclosure.
Here's how to avoid getting caught up in their empty
First and foremost, ignore
the posters nailed to telephone poles, at bus stops, and in
median strips that offer foreclosure help. Ignore
fliers that appear on your doorstep or in your mailbox,
especially handwritten notes that suggest "help" is on the
way from someone you know or who has your best interests in
mind. While facing foreclosure is difficult, don't be
lured by these promises being offered that are too good to
If you're facing
foreclosure, talk to your lender about restructuring the
payments or refinancing your loan. Be wary of
individuals who offer to pay your mortgage and take the
house off your hands. Here's how the scam works:
- The scam artist finds
homeowners through public-foreclosure notices in
newspapers or government offices.
- The scam artist contacts
you with a simple message: "Stop foreclosure with just one
phone call" or "I'd like to buy your house"
- The first meetings offer
you a "fresh start" and may include testimonials.
- You're instructed by the
scam artist not to contact a lawyer or your mortgage
lender, and to let the scammer handle the negotiations.
- The property is either
taken by the scammer or sold to someone else at
- You may become a
"renter" of your own home, given the promise that you'll
be able to buy it back later, but the scammer typically
sets the price higher than you can afford. If you
fall short on your monthly "rent" payments, you'll be
- The underlying mortgage
is often not paid off, so you not only are evicted but
still owe on the original loan amount.
How can you spot a con
artist? They use an array of tactics to reel in
homeowners, but here are some common approaches:
- Rush you into making a
- Work to gain your trust
by saying "we've been in the same situation"
- Promote themselves as
religious and their help as faith-based
- Promise that they'll
sell the house back to you at some point
- Pressure you into
signing a contract
- Pressure you into
signing away your ownership (called a "Quit Claim Deed")
If your home is in
foreclosure, check to see if a letter from your lender is a
"deficiency notice", which means that you are behind in
payments and can still take care of the deficiency by paying
it off. If instead, you receive a letter that
announces a sale date, this means that you are subject to a
variety of fees beyond the amount you owe in back payments.
There is usually time before the sale to work out a new
repayment schedule with your lender (called a
loss-mitigation plan) or to even sell the house.
If you find yourself facing
foreclosure, seek out free housing counseling.
Legitimate services are certified by the Department of
Housing and Urban Development (HUD) and can be located at www.hud.gov.