Thursday, June 18, 2009

Four Tips on Spotting “Stop Foreclosure” & “Avoid Foreclosure” Scams

Unfortunately, it is a sign of the times we live in that scam artist tend to target those who are already down on their luck. One of the most obvious signs that a person is having financial problems is that they are seeking foreclosure advice on how to stop foreclosure or avoid foreclosure in an effort to save their home. As soon as the scam artist hears the words “Save My Home From Foreclosure”, the consumer becomes an instant target. This article explains 4 useful tip to spotting “Stop Foreclosure” & “Avoid Foreclosure” scams.

Four Tips to Spotting “Stop Foreclosure” & “Avoid Foreclosure” Scams

1. You are Being Asked For Large Amounts of Money Up Front

Most reputable companies who engage in the business if giving foreclosure advice will provide you with at least one free consultation. Since laws and policies vary from state to state and from mortgage lender to mortgage lender, it is very difficult to find anyone with the expertise to stop home foreclosure in every situation. If a person is not willing to speak with you, gather some basic information, and assess your particular situation without first receiving payment, it is probable another “Stop Home Foreclosure” scam.

2. Companies That Offer Good Foreclosure Advice Have References

To most people, their home is their most important asset as well as the roof over their family’s head. The most common thing most foreclosure counselors hear from anyone looking determined to avoid foreclosure is “I need to save my home from foreclosure because I have no place else to go”. If a company is giving consumers sound foreclosure advice and helping homeowners save their homes, they will be able to provide references to other people to whom they have provided foreclosure help.

3. Learn The Difference Between a Foreclosure Counselor and a Foreclosure Investor

Many of the ads targeted to homeowners trying to avoid foreclosure are paid for by companies that are actually foreclosure investors. Foreclosure investors are companies that buy and sell properties for profit. A foreclosure counselor is someone whose job is to provide foreclosure help and foreclosure advice to consumers that are determined to stop home foreclosure and remain in their home. Many, if not most, legitimate foreclosure counselors do not invest in real estate at all. It is important that you know the difference. If you are working with a foreclosure investor who promised to buy your property as a means of avoiding foreclosure, make sure he or she has the funds to buy your home or, if they are using a mortgage to make the purchase, can provide a mortgage pre-approval letter at the least.

4. Make Sure Whatever Method You Use Will Actually Stop the Foreclosure

I have seen many homeowners try to stop foreclosure by deeding the property to a friend or family member, signing a forbearance agreement, or taking money from foreclosure investors and giving them control of the property. In many cases, these methods will not prevent home foreclosure, even though the person providing you with foreclosure advice claims they will. You must make sure that whatever method you think is your best chance of avoiding foreclosure will actually stop the foreclosure process. If you don’t, you may end out of your home and still forced to face the fact that you have done nothing to avoid foreclosure.