When you’re worried about losing your house to foreclosure, you’ll need a foreclosure defense lawyer on your side to help you create a mortgage modification plan. Unfortunately, there are many foreclosure rescue scams out there designed to exploit consumers, and over the years they’ve only become more sophisticated.
At the Buchalter Law Group, you can trust that our skilled legal team will assist you with the highest levels of integrity and service. With more than 35 years serving clients throughout Brevard County, we can help you explore all the legal options when you’re facing foreclosure. In this post, we’ll discuss some of the most common foreclosure rescue scams currently in circulation, and how to recognize the signs of a scam.
Types of Foreclosure Rescue Scams
Modern scammers are skilled at finding those who have missed mortgage payments – whether by using public foreclosure notices or by illegitimate means – and then acting quickly on that “lead.” By playing off an owner’s fears of losing their home and repeatedly referencing personal information, rescue scam artists hope to take advantage of people who are already dealing with significant financial distress.
Whether the foreclosure scam comes by mailer, in person, or during a well-timed phone call, these deceptions can be surprisingly subtle. Scammers are also continuing to refine them as consumers become more aware of the signs, and as the Federal Trade Commission (FTC) pursues legal action against fraudulent companies.
Here are some of the most common forms of foreclosure rescue scams:
- Equity skimming: During the mortgage crisis in the early 2000’s, equity skimming became one of the most common forms of real estate fraud. Promising to help homeowners avoid foreclosure and continue to rent their homes, an “investor” will ask for a deed transfer, and then sell off the property to a straw borrower. Once the sale is done, the investor uses the proceeds to pay off the defaulted loan and pocket the equity, leaving homeowners high and dry.
- Forensic loan audits: Some loan modification companies sell “forensic loan audits,” purporting to have software that can check whether your creditor was in compliance when you took out your mortgage. These scams primarily seek to collect your personal information, and often ask for substantial fees in return for service.
- Mortgage modification scams. Whether promising forbearance, automatic mortgage modification, or an easy repayment plan, a mortgage modification scam will aim to look and sound like official U.S. government programs. Mailings for these kinds of scams will typically use urgent language and broad claims about how many customers have gotten a loan modification.
- Fake credit counseling agencies. Fake or for-profit credit counselors will ask for large up-front fees, and offer debt management programs designed to profit their agency alone. Although it can be hard to track the exact numbers, most legitimate credit counselors only recommend debt management plans for 10% to 20% of their clients.
Common Red Flags for Rescue Scams
It can be difficult to tell when a financial company is illegitimate, as they will intentionally try to mimic the look, feel, and sound of legal enterprises. However, there are a few telltale signs that you should keep in mind when examining a debt management solution.
You may be dealing with a foreclosure scammer if:
- They use language like “foreclosure service” or “mortgage consultant.”
- They make guarantees about avoiding foreclosure, debt consolidation, or quick refinancing solutions.
- They require an up-front fee before providing any services.
- They tell you to cease contact with your bankruptcy lawyer, credit counselor, or other reputable financial expert.
- They ask for the title or deed to your property.
- They are actively soliciting you on the basis of foreclosure.
- They pressure you to sign contracts.
- They mostly work with you through verbal agreements rather than written documentation.
At Buchalter Law Group, our Brevard County foreclosure lawyers can review your case and give you a better understanding of all the legal options available. Call us today at (321) 320-6088 for a free case evaluation.