Suppose you are in a bad situation and you fear you will lose your home. You are up late fretting about this, when all of a sudden, as you are trying to channel surf your problems away, you hear an infomercial that someone has the answer to your housing woes! They will share it with you, if you just call for free mortgage help. Operators are standing by…
It is too good to be true. Though all the great economic and social thinkers in the country are struggling to find a solution to the housing crisis, you have found the answer at 3 am. So you call and the company promises to solve all your foreclosure problems, a dream come true!
How the Programs Work
You find they want an upfront payment, often equal to a month’s mortgage payment. This is a stretch for you, but maybe worth it. They say they will intercede with your lender. They may ask to you to sign over a deed to the property. You think all is well until your lender contacts you and says that because they have not heard from you or received any payments, they will have to take further foreclosure action. You are confused, you are mad, you are devastated. Then you realize: YOU’VE BEEN DUPED by foreclosure scammer!
The company may not have made with contact the lender, while the fee you paid probably never got to your lender, though you got a phony document that the foreclosure has been set aside. You may owe your lender more than you did before you called for “help.” You may receive a bankruptcy filing in the mail, filed in your behalf, without your knowledge. You may end up with more legal bills, a poor long-term credit picture that will make it hard to buy or rent for 10 years, and perhaps, have no home if he has signed over the deed.
Types of Scams
There are many variations on these scams, but in any case, you usually end up in worse shape. Foreclosure scams fall into three main categories:
Phantom help: The company promises to contact your lender, which they may or may not do, regardless of what they tell you. They may fill out some basic paperwork you could have completed yourself.
The bailout: The company offers to buy the home and rent it back to you until you can buy it back. Many times, they pocket what you pay while never dealing with your lender, so you end up with no property and no place to live.
The bait and switch: The company may have you sign documents to make the mortgage current, but actually you are signing over your home.
Free Help Available
Not all companies who charge a fee for mortgage help are scammers, but if you’re at risk of foreclosure, legitimate free help is available from several sources:
The Federal Government through Making Home Affordable. Even if you do not ultimately qualify for this program, there is plenty of free or very low cost help available from HUD-approved counselors and non-profit groups that will either help you stay in your home or move on to a new stage in your life. Ironically, since the government started its program, foreclosure scams have actually been on the rise.
The State of Maryland through the HOPE Program. HOPE (Homeowners Preserving Equity) is committed to help both owners and renters affected by impending foreclosure. Homeowners can find information about free foreclosure prevention counseling by calling the Maryland HOPE Hotline at 1-877-462-7555 or by visiting our counseling page. More Myths and Facts about Foreclosure Prevention are revealed on their website.
If you want to sell your home quickly and move on with your life, Express Homebuyers can help with that. We can buy your home outright or list it for sale. Fast!