Foreclosure Scams Still Exist

Filed under: Mortgage News

Unfortunately, many homeowners are still struggling with the possibility of foreclosure. And, where there are foreclosures, there are foreclosure modification scams.

It is imperative to understand that these scams can only lead to more stress and problems for the homeowners and if you know how these scammers work, you can definitely save yourself some money and grief in the long run.

scam-alert-3Kimberly Allen, a mortgage housing counselor says that these scammers often work hard to present themselves as legitimate representatives to the homeowner, often gaining the homeowner’s trust only to rip them off.

“Homeowners should be cautious of Web sites or companies with names similar to legitimate government programs,” says Allen. “Many scammers are presenting themselves as affiliated or associated with the government when that is not the case.”

How can a homeowner ensure that they are actually talking to a legitimate source if he or she is looking at a possible foreclosure modification?

According to Douglas Robinson, a spokesperson for NeighborWorks America, which is a national nonprofit organization created by Congress to provide support for homeowners in need, he offers these tips:

  1. If you are using the internet, make sure you stick with Web sites that are officially associated with the government. These sites will most likely have URLs that end with “gov.”
  2. If you are talking to someone on the phone, you should feel comfortable asking for and receiving the main number of the agency that the caller is representing. This way, you can then call back to ensure the number is legitimate.
  3. Remember that a legitimate government agency will never ask for any personal financial information upfront and will never request any fees, ever. If the agency you are talking to makes any of these demands, it should serve as a major “red flag.”
  4. It is a great idea to seek extra reassurance by visiting the government agency in question to make sure it is legitimate.
  5. Be wary of someone who offers you to turn over the ownership of your property, especially if they promise to buy your home and agree to let you rent it out.
  6. Remember that the foreclosure process is lengthy and if an agency promises to make your foreclosure problems go away overnight, it is probably a scam.
  7. Avoid any company that offers to collect your mortgage payment while negotiations are going on about your foreclosure. These companies will take your payments and then disappear.

The Housing are Urban Development has approved counseling agencies for you if you are in a foreclosure situation free of charge so contact them if you are in this dilemma.

If you have any questions about anything in the mortgage industry, please contact Bill Provost of Vintage Mortgage Professionals at (760) 282-4415.