With the spike in foreclosures across the nation comes a spike in foreclosure scams. With that in mind, the Federal Trade Commission has issued an outline for identifying and avoiding cons. The three most commonly reported cons are:
- The foreclosure prevention specialist: a phony counselor who does some paperwork on behalf of the homeowner and then charges outrageous fees. This counselor provides a false sense of hope while doing nothing to save the home. Make sure people hired on your behalf are qualified.
- The lease/buy back: The scammer promises the homeowner he can stay in the house as a renter and buy the home at a later date in exchange for signing over the deed. The terms of the arrangement are made so demanding by the scammer that the homeowner cannot make payments and is evicted.
- The bait-and-switch: Papers are presented to the homeowner to “bring the mortgage current” when actually they are signing over the deed to their home to the scammer.
Credit: FTC document