If you're facing foreclosure, you're probably already in a desperate situation. Scam artists prey on people who feel as though they are running out of options, which is why foreclosure rescue scams proliferated in the aftermath of the 2008 Financial Crisis. While that crisis has largely abated, foreclosure rescue scams nonetheless continue. Being able to spot such scams is important in order to protect not just your home, but your family's financial well-being. Here are three ways to spot a foreclosure rescue scam.
1. Grandiose and unsolicited claims
If your house is in the process of being foreclosed, then receiving a letter from a company promising it can "save your home" can seem like a miracle. Sadly, receiving unsolicited communications from foreclosure rescue companies is often a sign of a scam. Remember that legitimate housing counsellors do not solicit people who are facing foreclosure; rather, you must actively seek out such help. If somebody makes an unsolicited claim that they can help you stay in your home then the offer is probably too good to be true.
2. "They'll take care of everything"
If a foreclosure rescue company tells you to stop contacting your attorney, housing counsellor or lender then you should be extremely cautious. An attorney, after all, represents you and is looking out for your best interests, so why would a foreclosure rescue company be so afraid of what your attorney may tell you? The answer is likely because that "rescue company" wants you to do something that is clearly not in your best interests. You should be especially suspicious if the rescue company pressures you into signing paperwork without letting your attorney look at it first--they may actually be trying to trick you into signing over the title to your home!
3. Mortgage payments or upfront fees
Your mortgage payments should be going to your lender, not a foreclosure rescue company. When such a rescue company tells you to make mortgage payments to them instead of your lender then you can be fairly certain they are trying to scam you out of your money. Likewise, some rescue companies ask for upfront fees in order to carry out their promises, but what often ends up happening is that they take those fees and do little or no work to help you avoid foreclosure.
There is a better way
Foreclosure rescue scams are truly reprehensible since they prey on people who are already in desperate situations. A better way to deal with foreclosure and foreclosure rescue scams is to talk to a consumer rights attorney. At Weisberg Law, our attorneys represent you, meaning they will fight to uphold your rights and do whatever they can to help you stay in your home and get you back on your financial feet.