• 27
  • August
    2010

Over the last few years, homeowners all over the country have been threatened by possible home foreclosure. Financial difficulties brought on by job loss, the economic slowdown, and the collapse of the real estate market have made the prospect of losing their home to foreclosure a very real possibility for many people.

Unfortunately, in times like these, when people are faced with losing their home and most valuable asset, there are many unscrupulous individuals and companies that attempt to take advantage of those who in financial trouble. If you are approached by someone offering to help you prevent foreclosure or obtain a mortgage loan modification, you need to be aware of the signs of a potential loan scam.

Here are a few signs that a company may be trying to run a scam:

  1. A company asks you to pay a fee in advance before working with your lender. If you are asked to pay in advance, there is a chance that the individual or company will do little or nothing to help you. Thoroughly investigate a company before paying them.
  2. A company guarantees they can obtain a loan modification for you. Avoid companies that make big promises or offers that are too good to be true.
  3. A company advises you to start making payments to them instead of your mortgage company. Some scams involve an individual or company convincing homeowners to funnel payments through an intermediary who then forwards them to the lender. Eventually, the payments stop getting sent to the lender and the homeowners end up defaulting on their mortgage.
  4. A company asks you to sign over your deed or sign paperwork you don't understand. Some scams involve complicated real estate transactions. You may want to speak with lawyer before you sign any papers you don't understand.
  5. A company claims their program is affiliated with the government. Many scams involve convincing people that they are dealing with a government-sponsored program. If you have never heard of the program, contact your lender to see if the program is legitimate.
  6. A company asks you to release or reveal financial information. Don't reveal your financial or personal information to anyone you don't know and trust. When in doubt, contact an attorney or your lender before sharing your confidential information.

Related Resources: 6 things you should know (Loanscamalert.org)