Mortgage rescue scams (including some loan modification programs) target people who fear losing their home and ruining their credit due to foreclosure. These scams can end up costing you the home you're desperately trying to save from foreclosure. Here are the 3 most common scams . . .

Foreclosure rescue scams are often one of these categories:

• Mystery help - The con artist charges a very high fee ($1,000-$2500 or more) for phone calls and letters to the lender that you could have done yourself. Or, the scammer promises to represent you in an official capacity, but does not follow through. You receive little or no help to stop the foreclosure from taking place, and the scammer is profiting from multiple homeowners through their very convincing sales pitch.
  
  
• Private Investor scam - A "real estate investor" offers to bring your payments current if you'll sign over the deed. As your new property manager, he offers to keep making the payments in the future. He'll then promise to rent the house, and you won't have a foreclosure on your credit because the payments are being made for you. In reality, the "investor" will rent the house, but never make a mortgage payment. The bank will eventually foreclose, your credit will be ruined,   and the renter will be evicted. The only one who profits is the "investor," who pocketed the free rent from you and the unsuspecting tenant.
  
  
• Bait and switch - The rescuer will tell you that you are signing documents for a new loan that will bring your past due payments current and possibly even lower your new payments. In reality, you are signing documents that will give the scammers ownership of your home. Through this forgery, you will still owe for the mortgage but will no longer have the asset.

These rescue scams usually begin with offer that sounds too good to be true

·         A scammer finds people in need of "help" through local public foreclosure notices.

·         The scammer drops off a flier on the homeowner's doorstep or calls to offer their service.

·         A meeting is set up, and the victim's hopes and dreams of a better future are exploited.

·          The scammer will recommend that you stop all contact with the lender and any counselor that you may have been working with, so they can properly represent you.

·          The scammer will do very little, if anything, to help with the actual foreclosure. A few token phone calls or a little bit of paperwork may be all he does, to make it look like he's trying to help.

·          People who thought they could stay in their own home as renters can now be evicted from the very house that they owned. And because the mortgage was not paid off, they have no place to live and still owe the mortgage.  

 

• Do not ignore that you are in financial trouble.
  
  
• Do understand whether or not you are actually in foreclosure. If you are behind in monthly payments, you will receive a deficiency notice. This will notify you of your delinquency, and give you a chance to bring the payments current or make some other workout. If you receive a Notice of Trustee's Sale, you are in foreclosure.
  
  
• Do speak with the lender. Try to work out a payment restructure or refinance your loan.
  
  
• Do find out how much time you have to resolve the issue according to your state laws.
  
  
• Do contact a counseling agency on your own if you need help. Make sure that the counseling agency is certified by the Department of Housing and Urban Development. Be wary if anyone asks you for money. You should not have to pay for legitimate housing counseling.
  
  
• Do find an attorney on your own. You can search through the National Association of Consumer Advocates, or search locally for a consumer protection attorney.
  
  
• Do not sign a contract under pressure. Always take time and review any documents on your own without any time pressure.
  
  
• Do not enter into any oral agreement. Get any offer in writing.
  
  
• Do not send payments to anyone other than your lender.
  
  
• Do not sign a home-sale contract or quit claim deed where you are not released from your existing mortgage, or without being instructed by your attorney to do so. Do not agree to any arrangement that allows you to rent your own property and then buy it back later.
  

What do to if you are a victim in a foreclosure rescue scam

If you find yourself in one of these scams, contact a consumer protection lawyer as soon as possible. If you think you may be the victim of criminal activity, such as forged documents being presented for your signature, you should contact your local law enforcement agency. Keep in mind these scams are very new , and there aren't many resources available to fight them. Consumer protection groups are already advocating for laws to fight these types of scams.

Here are some basic do and dont's if you are approaching foreclosure