How to Avoid Loan Modification & Foreclosure Rip Offs

With the rise of homes that are going into foreclosure into today's real estate market, more and more scam artists are preying on uneducated home owners with empty promises to save their homes from foreclosure.



Most information nowadays are accessible by lead companies, so when you are late on your mortgage payment, your lender reports your late payments to the credit bureau's and they turn around and sell that information to companies such as Foreclosure Rescue Firms and once the foreclosure process starts then this information becomes public record which is free information for these con artist.



These Foreclosure Rescue Firms prey on individuals in foreclosure as they know they are very vulnerable. So they compile a list and then start contacting home owners the following ways: Door knocking and approach home owners in person, send letters or post cards via mail, email and some even hire telemarketers in India to contact home owners via phone. Usually they will use sales teams that can sell ice to an Eskimo and will tell the home owner just what they want to hear, whether it's true or false.



Here is a list of some of the more common scam type Schemes:



- Lease-To-Own - They will ask you to sign over your title to their company and in return they will catch up the mortgage payments or refinance the property with better financing terms, which will allow the home owner to stay in the home as a renter and they will give you the option to buy back the property normally in a 1 - 2 year period. The intentions of most of these companies are just to get your home, as they know you wont be able to afford the new payments as they are normally higher than you were paying before, or they know you wont be able to qualify for financing within a year or 2.



- Bankruptcy - It's important to understand that bankruptcy does not stop foreclosure, it only temporarily delays it. Over 66% of people that file bankruptcy don't complete the plan, which places them back into foreclosure. Not to mention that bankruptcy will negatively impact your credit from years to come.



- Government Imposter Programs - There are a lot of companies that market themselves to appear as government affiliates and may use similar names that sound like actual government agencies.



If you do qualify for a government program you lender will know, so contact them.



It's important to understand that your mortgage lender has many options available to help you avoid foreclosure. A lot of home owners stop communication with there lender once they start falling behind to avoid the collection calls and never get to find out about the options that are available to them to save their home.



If you are going to hire a company to get you out of foreclosure and they are requesting an upfront fee, you will need to proceed with caution.



You will need to do some due diligence and thoroughly research this companies back ground and credentials. Ask for references and don't just go by testimonials that are written on their websites, as anyone can write these testimonials.



Both your lender and other government agencies can provide similar services at no charge to the home owner. The first step is to contact you lender and they can refer you to a government agency in your area.