There are homeowners currently having problems making timely mortgage payments or facing an upcoming possible foreclosure. Often people are contacted by a ‘foreclosure consultant’ or an ‘equity purchaser’ who seem to offer some supposed relief from this upsetting situation. If you are in a financial mess with your home and become a victim to a scam, you could lose both your home and the equity you have built and experience long-term harm to your credit rating.
How can you prevent being scammed by a foreclosure consultant? Make a phone call to your lender on your own, as they would rather work with you, the home owner-not the foreclosure consultant. Try to contact housing counselor approved by the U.S. Department of Housing and Urban Development (HUD), who probably can help you for low or no cost to you. You can get a referral to a housing counselor by contacting HUD at 1-800-569-4287 (TTY: 1-800-877-8339) or do a search for the website for HUD.
Here is what not to do-and there’s plenty. Don’t sign a contract without reading it, don’t believe for one minute that anyone can stop a foreclosure no matter how dire the circumstances, refuse to give out personal financial information or bank account information, don’t listen to anyone if they tell you to not contact your lender or a nonprofit credit counselor, don’t pay anyone promising to give you foreclosure relief before they offer you their services, and don’t halt payments to your lender and divert the money instead to the foreclosure consultant. You will probably not see that money again.
Foreclosure consultants are not lawyers, nor are they qualified to give you legal advice. If you get a contract, make sure to read the fine print. If possible see an attorney to tell you what the fine print actually means if you don’t fully understand the implications of the contract. You want to understand everything, as you do not want to unknowingly transfer ownership of your home to the foreclosure consultant. They can evict you and steal all of your home’s equity, so beware.
Never make a mortgage payment to a foreclosure consultant, who could promise to give the money to your lender. Most likely they will keep the money for themselves instead. Pay the lender directly yourself, if you have the money.
Don’t be mislead or scammed by criminals that use fake letterheads belonging to major lenders that are designed to get your money in their illegal pockets. These fake letters offer to modify your loans for a fee, and make you think that it is from a lender. People have paid thousands to these fake addresses, only to realize they have been conned. This has currently happened in the state of California, and it could happen anywhere.
Don’t believe extravagant promises by anybody for a fee. Contact your lender directly by phone or in person and ask them if they are offering to modify your loan for a fee. They will fill you in on the details on what you should know.
Lastly, don’t be afraid to contact your lender if you have any suspicions or get offers of relief by a foreclosure consultant who wants a fee before helping you. Even if you owe money on your mortgage, do not cut off all communication with your lender or ignore any communication with them. Many lenders will offer to work with you if you are behind you mortgage, so contact them and find what options you might have.
Aaton Maston writes family money saving tips for Cheapspenders, which is a money saving website that offers tips and advice on saving with grocery coupons, starting a small business, and much more.
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Tags: Foreclosure, mortgage