Articles - Archived Money Matters
(Copy and paste the text into your document)Foreclosure Rescue Scams
If you are a homeowner in distress, you could find yourself the target of a fraudulent loan modification company. As such, these scam artists take advantage of people who have fallen behind on mortgage payments, promising to negotiate lower interest rates so homeowners can stay in their homes and afford their monthly payments.
How do you spot a scam?
Watch out for any company that makes promises. Scam artists only have their best interests at hand, so they may tell lies to sell a service. Unlike legitimate loan modification companies, fraudsters require homeowners to pay fees upfront in order to negotiate deals with the lender. Fees usually range from $500 to $1,500. A few companies have been known to require the victim to make their mortgage payments directly to them while lender negotiations take place. The end result: Mortgage payments never make it to the lender.Another tactic is the rent-to-buy scheme. In this scenario, the victim surrenders their deed so they can remain a renter in the residence with the hopes of buying the home back at a later date, which typically never occurs. The bait-and-switch scam involves signing documents for a "new loan" to make the existing mortgage current. Unbeknownst to you, you have actually signed documents surrendering the deed to your home.
