How Not to Fall for Foreclosure Rescue and Loan Modification Schemes

I have been hearing a lot of this sort of thing going on and it's something that I feel that I need to keep reinforcing and helping people who may be in a desperate situation more aware.

A foreclosure rescue or loan modification scheme is where the customer is victimized financially by a third party promising to stop the foreclosure or to provide a loan modification to save the home. These schemes prey on the desperation of people who have fallen behind in their mortgage payments and are in danger of losing their home.

Here's how it works:

The perpetrator contacts the homeowner in foreclosure when public default or sale notices are published. The perpetrator presents himself or herself as an experienced foreclosure or loan modification specialists who offers to eliminate or substantially modify the mortgage debt and save a house for a fee. The perpetrator guarantees to save the home or provide a loan modification, but instead collects the fee and disappears without providing any really assistance to the homeowner
In another scheme, the homeowner is approached by the perpetrator who offers to help refinance or modify the loan. The homeowner is then asked to sign documents that he or she later learns transferred ownership of the home to the company supposedly providing help.

Here's some of examples of schemes that are going around:

Case Study #1

Shannon has fallen behind in her mortgage payments. Worried that her house will go into foreclosure, she contacts a company listed on a neighborhood flyer that advertises financial counseling to those who are having trouble paying their mortgage. The company counselor offers to help her for an upfront fee of $1,300. However, the information provided by the company is insufficient and does not help Shannon in any way. Now she is out $1,300 and even further behind on her mortgage.

Case Study #2

Laura is approached by a gentleman who offers to help save her property from foreclosure. The man instructs Laura to sign the property over to his company using a quitclaim deed and his company will assume all debts and liabilities, allowing Laura to walk away free and clear of payments on her mortgage. The man's company rents the house to another party, but makes no payments on her mortgage. After one year of non-payment, the house is foreclosed upon. However, unbeknownst to Laura, even though the house was deeded to the man's company, Laura's name remained on the mortgage. The man's company and the renters walked away from the house and Laura is still left with the responsibility for the mortgage.

If you need help paying your mortgage ask for help immediately. Whatever you do, I always suggest you talk to your lender first to see if they can help you. Chances are if the lender can't help you, there aren't to many others who can.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

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