Fraud Tip of the Day - August 2

Beware foreclosure rescue operators asking you to transfer your home's title to them in order to save your home. You could lose all your equity and your home!

Adjustable rate mortgages rise and fall with the cyclical nature of our "boom and bust" market economy. They're great when interest rates are low, allowing for some who otherwise wouldn't be able to afford a mortgage to get one. However, on the flip side, they can be very taxing to one's budget when rates go up.

Sometimes rates can increase so quickly homeowners have trouble keeping up with their mortgage payments. This set of circumstances can create a ripe and fertile marketplace for fraud.

The Rise of Foreclosure Rescue Operators

In recent times, state regulators have been trying desperately to alert the public to a fairly new and dangerous threat regarding companies calling themselves "foreclosure rescue operators". These companies claim they can assist homeowners facing foreclosure with options that allow them to keep their property. In reality, these "options" give foreclosure rescue operators the tools in which to take your home away from you.

Homeowners often fail to realize what's happening and wait too long to try and get help. By waiting too long, homeowners put themselves in a position of desperation which is taken advantage of by these opportunistic companies. Beware of those who contact you during a time when you may be facing foreclosure. Their company could seem like the answer to all your mortgage troubles. Remember the old saying, "If it's too good to be true, it probably is".

How the scam works

These companies offer a few different ways in which you can try and keep your home, even if you're facing foreclosure. The typical pitch is to "offer" the option of either transferring the title or outright selling your home to the third party investor. After which you can then lease your home from them, allowing you to keep living at your residence. Then, after you've been able to get back on your financial feet again, the company promises to transfer the title or sell your home back to you at a future date in time.

However, these companies don't want you to be able to make the monthly lease payments on your home. Their lease agreements, supposedly designed to help you keep your home, often have monthly payments higher than your original mortgage payment. People rarely get their home back, if ever. Once the transfer is completed, you lose control and the equity of your home. Next comes eviction by the so called "foreclosure rescue operator".

How to protect yourself

To protect yourself from these types of opportunity hunters and frauds, never agree to temporarily sign your home over to another claiming it would be only as a means to help you. Instead contact only legitimate, well known entities who specialize in assisting homeowners with mortgages.

If you find yourself having trouble making mortgage payments, try one/all of the following:

• Contact your lender immediately and try to negotiate a payment plan.
• Contact reputable non-profit debt counselors.
• Consider selling your home in order to pay off the loan before foreclosure can occur.
• Keep away from all unsolicited offers from people who claim they can help you save your home.

Mortgage Foreclosure Rescue Scam Links: