By David Maillie

With the recent rise in foreclosures it didn’t take long for a similar spike in foreclosure repair scams.  Scammers from coast to coast are obtaining names of people going through foreclosure and barraging the potential victims with hoards of mailings, fliers, phone calls, etc… all promising false hope.  They claim they can make the bank stop the foreclosure, they will buy the house and then rent it back to the victims whom can buy it back later.  They promise help and relief and provide false hope and leave a trail of heartbreak, lost hope, worse debt, deceit and fraud in their wake. 

What can one do to stave off these fraudsters?  Number one, if anyone contacts you about foreclosure relief or rescue there is a 99% chance it is a scam artist whom is going to take advantage of you and possibly make your problem much worse all the while lining their wallet and pockets with your hard earned money and any equity you have in the property.  Do not respond to any of these mailers, calls, or fliers.  Instead, if you are having problems with your mortgage(s) contact the bank or lenders involved.  With the recent 93% foreclosure increase in the last year and with the government reviewing legislation and such on bad lending practices the banks and lenders will be more willing then ever to listen to you and try and work things out with you.

Don’t feel afraid to contact a secondary loan holder and ask to have the payments lowered and the total loan amount.  If you can’t pay on the first or primary mortgage and your house becomes foreclosed upon, the secondary mortgage holder gets absolutely nothing.  If you are having problems paying both payments get the total and payments on the second or any junior loan secured to your property lowered and reevaluated by that lender.  This is exactly what real estate short sales do.  Real estate investors secure exclusive control of your property a few papers including an authorization to release and  a subject to contract.  They then contact the bank or lenders and negotiate a reduced purchase price based on the amount owed (outstanding mortgage).  Short sales investors are only successful 20% of the time as many banks and lenders do not negotiate or will not allow for a profit for the investor.

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A real estate investor is not necessarily a scam and can provide a way for you to get out of your foreclosure while limiting the damage to your credit report.  However, they are not free and they are looking to make a big profit off your misfortune, so before you decide to sign up with one make sure you agree that you will get a large portion of the profit at sale and make sure its in writing.  Besides they are not doing anything you can’t do yourself. 

Now back to the big scammers – anyone that charges a fee or wants you to sign over papers without contacting your bank or mortgage lender or a lawyer first is GOING to scam you.  Don’t let claims of Christianity or similar ethnic backgrounds and such cloud your mind.  Just think back to Jim and Tammy Fay Bakker, Rev. Tilton and Jerry Falwell – they all used religion to rip off millions of good, well intentioned people (according to the bible there is no worse sin then to deceive, steal and lie in their former positions). 

There are a lot of scammers out there and they are licking their chops at the latest increases in foreclosures and the fact that it is going to continue for at least another year or two and will get worse before it gets better.  Upon attending a recent real estate meeting in my hometown, I was surprised at the conversations some were taking apart in.  Everything from how to steal a homeowners equity to securing ownership with different versions of paperwork and methods for getting unwilling participants to sign including making them sign blank or non completely filled out forms.  It was a meeting of sharks worse than car wholesalers at a car auction.  These are the people that will come to your house and take advantage of you.

They may strip your equity, charge exorbitant fees, obtain control over your property and then open new loans on your property and then disappear.  The worst of these will warn you not to contact the bank and that they will take care of everything.  They don’t want you to contact an attorney as the attorney would expose their plot and warn you not to sign.  If anyone comes to your house or wants personally identifying information (social security numbers, etc…) over the phone ask them to send you their offer in writing.  Tell them your attorney reviews everything for you – this takes the heat off you and you are done.  Watch them disappear as quickly as they came.  Here is a great link to the FTC (Federal Trade Commission) and some great tips on avoiding foreclosure scams and your rights and where to report problems if you think you have been victimized:

http://www.ftc.gov/bcp/edu/pubs/consumer/homes/rea04.shtm

The best way to protect yourself from foreclosure scam artists is to stay in contact with your lenders.  If you are having problems call up your lenders and try and work something out.  They are much more willing to do this now.  Also there will probably be some sort of relief soon coming from Washington and your local state government that may help you out.  Do not answer any adds, mailings, phone calls, fliers, etc… that promise foreclosure relief – you have a 98% chance of being scammed and being much, much worse off than you are now.  And as always, if it sounds too good to be true it probably is – and this definitely holds true with foreclosures.  Call your lenders and work something out.  They would much rather help you and keep you on the books then go through the foreclosure process.


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