How to Avoid Foreclosure Scams 

In recent times, many Americans are facing foreclosure. Unfortunately, there are a number of fraudulent foreclosure-related companies ready to take advantage of these homeowners at this vulnerable time. 

These fraudulent companies may call themselves "foreclosure consultants" or "foreclosure specialists." If a company claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a real estate professional, HUD-approved housing counselor. 

These scammers will find you as soon as the Foreclosure procedure starts. When your lender files your foreclosure notice with the public trustee in your town, an announcement is made in your local newspaper. Soon, you will begin to receive phone calls and mail from foreclosure scam artists. 

There are several scams they use to try to swindle you: 

Phony Counseling Agencies: Their fees are outrageous and you can do all the services they offer you such as call the lender and complete some paperwork. These counselors may also negotiate a repayment plan with your lender or organize a pre-foreclosure house sale on your behalf. However, these are things the homeowner can do themselves at no cost. 

Internet and Phone Scams: Some scammers impersonating lenders convince you to apply for a low-interest mortgage loan on the phone or Internet. They then steal your Social Security and bank account numbers. This scam will put you in double the trouble because you are still going through Foreclosure and now you’re facing Identity Theft. 

Lender Scams: A lender may claim to rescue you from this situation by refinancing your loan with lower mortgage payments. In the beginning, the mortgage payments are considerably low because you are paying the interest only. At the end of the term, you suddenly realize that the total amount you borrowed is still due in a lump sum balloon payment. If you can't make the entire balloon payment, you may lose your home to the lender. 

Fake Buyer: A person who calls himself a "buyer" stops at your door and convinces you to sell your property to him for an amount far less than market value and promises to pay off your mortgage. The "buyer" will advise you to transfer the deed of the property to him, move out of the house and stop communications with your mortgage lender. The "buyer" will then lease your home to a third party and start collecting rent. Unfortunately, this con-artist will make no effort to pay the mortgage payments, thereby allowing the lender to foreclose on your property. Remember that signing a deed over to a third party does not relieve you from your mortgage obligations. 

Source: www.10realty.com/foreclosurescams.htm