If you find yourself behind on your mortgage payments and your home in foreclosure, scammers may attempt to take advantage of your vulnerable financial state.
The perpetrators of these scams, which claim they can resolve your debts and halt the foreclosure of your home, deceive you into providing them with enough information to take ownership of your home and for a fraction of its market value, leaving you stranded and homeless. Still, you will carry the title of holder of the mortgage of the home that is still in foreclosure.
If you are going through the foreclosure process, it is important to recognize what these scams may look like and how you can best protect yourself from them.
How Scammers Deceive Homeowners Going Through Foreclosure
In New York State, when your home enters foreclosure, your lender will file a record of foreclosure with your local county clerk’s office. The information becomes public, including the address of your home.
Scammers gather this information and may reach out to you via telephone, mail or even show up knocking on your front doorstep. They will offer their “services” which promise to rescue you from your foreclosure.
Common Foreclosure Scams to Look Out For
Scammers offer seemingly legitimate solutions to get your home out of foreclosure without ever following through on them. They may be able to deceive vulnerable homeowners with:
Loan Modification Scams: Scammers might claim that they can get you a loan modification or lower your mortgage payments for a fee. They may even say that they are working closely with your mortgage servicer to guarantee a solution.
However, your mortgage servicer is the only one who has the power to grant a loan modification. No third parties will be involved.
Phantom Help Scams: Scammers may offer consultation services and make false promises to prevent foreclosure. However, they may charge unreasonably high fees up front and provide no actual assistance.
Title Transfer Scams: Scammers may trick you into by claiming that they will be able to pay off your mortgage payments if you sign over the deed for your home. However, once the home is their name, they may sell it and take loans out against it while still leaving you responsible for the mortgage.
How To Protect Yourself
It will be easier for scammers to deceive you while you’re in a highly stressful financial battle and you don’t exactly have your wits about. Still, it is important for you to be aware of your rights so you can best protect yourself from falling into their traps.
Contact Your Lender Directly: Never trust third parties to handle your mortgage issues. Only your lender will be responsible for handling all of the logistics of the foreclosure process.
Never Pay Upfront Fees: Legitimate foreclosure assistance from HUD-approved counselors does not require upfront payments. Never give anyone money upfront if they ask for it.
Don’t Sign Documents You Don’t Understand: Scammers hope to trick vulnerable homeowners with complicated jargon presented in lengthy documents, hoping that they are so desperate they won’t take the time to thoroughly read it. Always have your legal documents reviewed by an attorney.
