Jan
Foreclosure Fix-it scams
LA Times has an article about the FTC starting to crack down on what are referred to as “foreclosure fix-it” scams. They include a list of common warning signs, which follows:
* Guarantees to stop your foreclosure, irrespective of how much you owe or how much income you have to resolve your unpaid bills.
Most major lenders and the servicing companies they employ are willing to negotiate loan modifications to cut payments or reschedule debts, but if you don’t have the income to handle even lower payments, foreclosure is hard to avoid. Any company that spins you a different story is probably a scam.
* Requires you to pay money upfront before any services have been rendered. Liebes said some states specifically prohibit foreclosure rescue firms from collecting any money in advance, but Internet-based companies often ignore those rules.
* Tells you to avoid contacting your lender or servicers directly, delegating all negotiating duties to the firm. In fact, borrowers themselves tend to be in the best position to speak with servicers about their situations and possible alternatives to foreclosure, including short sales.
* Instructs you to send mortgage payments to its office address instead of to your lender or servicer. Such firms not only take your money with little or no services rendered, but dig you into a deeper financial hole with your lender.
* Asks you to turn over the title or deed to the property so that the company can be in a stronger position to deal with the lender. That’s the equivalent of kissing your house — and any remaining equity — goodbye.
Unfortunately, like the Hydra, chopping off one head just leaves you with two others in it’s place.
