How to Avoid Foreclosure Rescue Scams

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by Victor Valquez
(New York, USA)

When you have fallen into hard times financially and you are facing foreclosure, thinking clearly can be nearly impossible. Unfortunately, this is when all the vultures come out of the woodwork to take advantage of your desperate situation and you absolutely must consider your solutions carefully and deliberately.

Of course, it is probably true that you may have made bad decisions along the way. Everyone makes bad decisions at one point or another and there is usually a price to be paid for making those bad decisions. Don’t let the price you pay be losing your home to a foreclosure scam artist.

After your foreclosure process begins, it won’t be long before it will become a public record. At that point you will begin receiving contacts from literally hundreds of real estate agents, investors, lenders, and foreclosure rescue businesses. Some of these will actually be legitimate. The vast majority will be attempts to steal your home or to steal what little money you have left.

In order to solve your problem you need to be able to quickly determine who is legitimately trying to help you and who is not. Here are some signs that you are dealing with a scam artist.

The first sign that your potential financial savior might not have your best interests at heart is that they may ask you for an upfront fee. This group will include some real estate agents and lenders but primarily this group will consist of firms which claim to do “forensic audits” on your loan file.

They claim they can uncover all the legal mistakes that were made when you originally closed your loan and that this will actually result in the lender basically paying you to keep the home so they don’t get into trouble. All they need is your upfront fee of several thousand dollars, which you can put on a credit card, and they will get to work.

They will claim to be wildly successful at getting loan agreements overturned. The fact is they are very, very rarely successful at doing anything other than disappearing with your money and never being heard from again. Don’t ever pay an upfront fee for a service such as this.

Another type of scam artist is the real estate investor who claims to truly have your best interests at heart. These are usually con artists who truly come across as caring individuals who truly want to help you. Of course,according to them, they have to make a living so some fees will be involved but in the end they will help you save your home.

The easy way to recognize this type of scam artist is that they will want you to deed your home over to them before they can stop the foreclosure. However, some of them will simply loan you money at astronomical rates and fees and have you sign a note securing that loanwith your house. In the first case, they claim they will rent the house to you until your credit is repaired and then sell it back to you for a predetermined price.

This rarely works out. In the second case, they already know you are having trouble making your house payment. Yet they feel you will be able to make payments on a second mortgage as well? This isn’t likely. Usually these “angels” end up foreclosing on your home themselves later.

In spite of all the stress and distraction in your life when facing foreclosure, this is the time you must force yourself to think clearly and look long at hard at your options. As difficult as it is to face, most often saving your home from foreclosure is not your best option.

Most often, the best strategy is to sell your home, rent for a while and then regroup to buy again when your finances have improved.

Updated: July 27, 2013 — 10:08 am

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