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Entry bubble Avoid Foreclosure Rescue Scams

By: Nicole | August 15, 2008 | Category: Home and Family

Mortgage PaymentsA few weeks ago, I wrote a post about avoiding mortgage foreclosure. I know that topic resonated with a lot of folks. In addition to other worries, homeowners must now be more guarded than ever against foreclosure rescue scams. The fear of losing their homes can make even the savviest consumers susceptible.

The Federal Trade Commission and the Office of the Comptroller of the Currency both provide general descriptions of the most common foreclosure rescue scams:

  • Lease-back or repurchase scams happen when someone offers to pay your mortgage and rent your home back to you. This scheme often involves signing over your deed to a con artist.
  • Refinance Fraud occurs when people pose as mortgage brokers and offer to refinance your loan so you can afford the payments. Con artists may trick you into signing over the ownership of your home by saying that you are signing documents for a new loan.
  • Bankruptcy Schemes attempt to abuse the bankruptcy laws. The con artist may even file a bankruptcy case in your name, without your knowledge.

Here are some general tips to help you avoid these scams:

  • Read and understand everything you sign.
  • Don’t sign blank or partially completed documents.
  • Make payments directly to your lender or mortgage provider.
  • Contact your lender directly to discuss payments and options.
  • Never sign over the deed to your house without consulting a lawyer.
  • Report suspicious activity to the FTC or your state consumer protection office.

For more information about housing, visit the USA.gov Homes and Housing Page. Do you have any other tips for avoiding foreclosure scams?

| View Comments [3] | envelope E-mail This Entry | Tags: bank   foreclosure   fraud   home   housing   lending   loan   money   mortgage   nicole   scams  

Comments (3):

blue comment bubble Posted by R. Miller on September 22, 2008 at 11:51 AM EDT

With the increase of finacila problems and foreclosures due to the economy there are those who want to take advantage of those in need. This is a very helpful warning to consumers. Thank you.

http://foreclosedhomes-realestate.blogspot.com/> Foreclosed Homes and Real Estate

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blue comment bubble Posted by Andy on September 30, 2008 at 09:11 AM EDT

Some great advice here and I hope folks facing foreclosure read this article carefully to avoid being the victim of fraud. This is a must read for folks in foreclosure. I wrote a follow up article on this topic for my readers ( http://www.savingtoinvest.com/2008/09/foreclosure-rescue-scams-warning-signs.html ) and hopefully all the publicity around these types of scams will reduce the number of victims we will see every day. Unfortunately the rate of foreclosures does not look like slowing down anytime soon.

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blue comment bubble Posted by Gov Gab Editor on October 16, 2008 at 10:19 AM EDT

We received a comment from Mr. and Mrs. Wright outlining their heartbreaking story of being the victims of the same type of scam that Nicole outlines above. Their comment is too long to post, but I would urge them and anyone else who's been a victim to contact your state's consumer protection office to report all the companies involved in the scam. The Wrights can find the Virginia office at http://www.oag.state.va.us/. They might also want to contact the Virginia Legal Aid Society at 1-866-534-5243 to get additional help.

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