How To Avoid Foreclosure Scams

If you find yourself in a situation where you are facing foreclosure, you may feel desperate to find a solution that will help you save your home. You are probably ready to do just about anything to avoid foreclosure. But it's important to be aware that many people in a similar situation have fallen victim to a foreclosure scam. Knowing the types of scams that are out there, will hopefully help you learn how to avoid foreclosure scams.

One common scam occurs when you are approached by a company or an individual offering you a loan so you can make your back payments. Carefully check paperwork before you sign, because in a scam these papers may actually give title of your property to this lender. Then what you're doing is agreeing to rent your former home at a high rate. When you can no longer afford these payments, you'll find yourself evicted.

There is another type of "rescue" scam. In this case the company or individual offers to act as a negotiator for you with your mortgage lender. You will be asked to make payment through the rescue company, rather than directly to your lender. But what happens is that your so-called rescuer does not contact your lender to negotiate. They simply pocket the money. Now you're in an even worse situation because the money you did have to put towards your mortgage is now gone.

Another kind of "rescue" scam is like the one above. But these guys are a little more aggressive. They insist that you not contact or speak to anyone about your foreclosure. You are instructed to avoid calls from your lender and even your lawyer, and to withhold payments, insisting they handle all negotiations. They may even sweeten the deal by telling you there is no fee, unless they stop the foreclosure. Then when foreclosure is imminent, they take steps to get your home.

These are only a few of the foreclosure scams that are operating today. You can easily protect yourself though by following a few guidelines.

First, never sign anything unless you have had an attorney examine the paperwork and explain it to you.

Second, be sure that you use your own lawyer. If you don't have one, check with the Better Business Bureau. Never use a lawyer that is recommended by the person or company you are dealing with. They may be part of the scam and possibly might not be a real lawyer at all.

Finally, if someone calls or knocks on your door offering their services hang up or close the door. If you need the help of a housing counselor, contact HUD for a legitimate referral.

If you are dealing with foreclosure, knowing how to avoid foreclosure scams will at least eliminate one potential problem. The best plan to deal with a possible foreclosure is to contact your mortgage lender and set up a meeting to discuss the situation. Because they hold your mortgage it makes sense that they have the power to solve the problem if it can be solved.