Friday, March 22, 2013

3 Foreclosure-Rescue Tactics Used By Fraudsters

By Sarah Parr

Foreclosure-rescue scam artists are some of the most misleading businessmen in North America today. They abuse, profit from and give concerned homeowners who are behind on mortgage payments a false sense of security. Scam artists typically target low-income homeowners from areas known as centers of foreclosure activity. They use common and familiar advertising methods to attract clientele.

Foreclosure-rescue scams are hard to decipher, but there are three general tactics used by unethical companies.

Pocketing fees
It is free to qualify for specific government programs that aid in foreclosure defense or the loan modification process. Speaking with a government agency-approved housing counselor is also free, according to Yet, homeowners frequently report unethical companies that charge clients for access to government foreclosure-rescue programs and housing counseling. A company could be a deception if it asks for a pricey upfront fee for access to the latest government program or a recent mortgage settlement. Consumers can easily find information on the latest government program or government agency-licensed housing counseling on the Internet. Homeowners should also be suspicious of companies that advise homeowners to pay mortgages to them and not to the loan servicer.

Making guarantees
Foreclosure relief or the modification of a loan should never be promised, and access to specific government programs may only be available for some borrowers. Unfortunately, mortgage relief scam artists will attempt to convince consumers that a loan modification or foreclosure defense handled by their company is guaranteed. A scam artist may also pose as a member of a legitimate organization approved by, or affiliated with, a government and state that a homeowner qualifies for a specific government program that aids in mortgage relief.

Posing as official
In order to appear official and dependable, scam artists will do anything. Non-attorneys often pose as attorneys who only offer loan modification services, according to the New York Times. Consumers should be careful when dealing with these lawyers, since most law firms provide loan modifications as one of many services. Some law firms even pretend to be non-profit consumer advocate groups that offer loan workouts or forensic loan audits.

Another kind of fake professional, the “foreclosure rescuer,” may convince a client to transfer the title or sell his or her home, and then stay in the home as renters. They will assure the former homeowners that they will be able to reclaim the house once they’ve recovered financially. However, the scam artist will have the power to evict the victims and claim the home.

People who risk losing their home should watch out for the common tactics covered above. Also, homeowners who would like a loan modification or who are at risk of foreclosure should never avoid any communication from their lender. Alleged scams can be reported to the Better Business Bureau, or to the Federal Trade Commission or Canadian Fair Trade Commission.
Sarah Parr is a writer who blogs about issues surrounding foreclosure and the mortgage relief industry

No comments:

Post a Comment