While the news that the foreclosure rate in the US finally seems to be slowing might be welcome, the number of scams designed to exploit vulnerable homeowners shows no such signs of abating just yet. Therefore, reports Fox Business, homeowners are being advised to be wary of any companies making foreclosure assistance offers that seem too good to be true.
Although not all companies offering such services are thought to be bad eggs, the Federal Trade Commission is warning that there are plenty of dodgy companies out there, and so homeowners need to be aware of how they operate.
Foreclosure scammers typically make outlandish claims through advertising on the radio, the internet, or even the old-fashioned way, with brochures, reports Fox Business. Sadly, these claims are often designed to grab the attention and convince homeowners that their homes can be saved, before later convincing them to part with their cash, rather than offering a realistic solution to their money troubles.
According to the FTC, foreclosure scammers operate two main ploys in their efforts to part you with your desperately needed cash. The most common of these scams is known as the “phantom help scam”, in which a fraudulent company will ask for money in order to have your loan refinanced. Some more brazen operators may even request that you send your mortgage payments directly to them instead of the bank. In either case, shortly after taking your money, the ‘company’ will suddenly vanish into thin air.
The second, more worrying kind of fraud is something called the “bait and switch”, a scam that sees homeowners being fooled into signing away their homes for nothing. The scammers will claim that in order to avoid foreclosure, you’ll need to sign a big heap of documents to process things. Buried deep inside all of that worthless paperwork will be the one document that actually means something – the one which transfers over ownership of your home to the scammer.
Any homeowner who is worried about losing their home needn’t be put off asking for help, but they do need to be cautious in order to avoid falling foul of any scams. The best way to do so is through dealing with HUD-approved foreclosure counselors who typically don’t charge anything for their services. And when it comes to dealing with companies, homeowners should always check them out before hand so they know exactly who they are dealing with – and be especially wary of those which “guarantee” your home won’t be foreclosed, as quite simply, there are no guarantees in this business.