Fake Foreclosure Rescue Operations Rising

The national foreclosure crisis did not only result in large inventories of repossessed properties for sale in the market and declining home prices. It also gave rise to a growing number of homeowners who are scammed out of their money and homes by fake foreclosure rescue operations.

If you are worried about being targeted by these scam artists, it is not probably better if you are aware of the different scams usually perpetrated.

• Upfront Fees – most scam artists will convince you that they can stop the foreclosure at once, if you will just pay them a certain amount as upfront fee. You should stay away from these offers since most of the scammers disappear as soon as they receive the money. In some states, a legitimate foreclosure rescue company is prohibited from requiring distressed homeowners to pay an upfront fee.
• Rent and Buy Back Option – another scheme that these scammers usually use is to make the homeowner believe that there is an interested investor who will temporarily shoulder the mortgage payments. The homeowner will only need to pay a certain amount as rent and they have the option to buy back the property after an agreed time. Unfortunately, the scammers will not pay the mortgage dues and run off with the rent money.
• Signing Over Ownership – in order to get their hands on the equity of your home, scammers will convince you to sign over your home’s title to them in exchange for stopping foreclosure. They will also agree to let you stay on as a tenant – paying the mortgage dues for a couple of months - but this time, they will borrow as much as they can against the equity you have on your home. After some more months, they too will disappear without a trace, leaving you with no equity and a foreclosure case.