Save the Dream :
Ohio's Foreclosure Prevention Effort
How to Avoid Foreclosure Scams
How Foreclosure Rescue Scams Work
If you fall behind on your mortgage payments, it is very common to receive telephone
calls, home visits, and direct mail from a foreclosure "rescue" service. Scam artists
often target defendants named in public records. The scam artists usually assert
that they are “foreclosure specialists” or “mortgage specialists,” claiming they will save
your home from foreclosure in exchange for a sum of money.
Unfortunately, many people pay the scam artist, but find out months later that the company
has done nothing to stop the foreclosure, and the house is set to be sold at a sheriff’s
sale. Don’t let this happen to you!
Watch out for handwritten notes that refer to the details of your situation, services
telling you not to contact your mortgage servicer, services promising to save your
house, and large deposits required upfront.
Tips to Avoid Foreclosure Rescue Scams
- Contact your mortgage servicer as soon as you have trouble making payments. You
may be able to negotiate a payment schedule.
- Contact a HUD-approved housing counselor for assistance if you are receiving letters
threatening foreclosure and are not yet in a lawsuit.
- Contact Ohio State Legal Services or the
Ohio State Bar Association to find an attorney
to represent you if you have a pending lawsuit against you.
- Get detailed information about the deadlines you face in resolving your problems.
Pay special attention to the date on which you would lose legal right to ownership
of your home.
- Be wary of any claim to stop foreclosure for a fee. Do not make a down payment upfront,
and always ask for written information before you make a financial decision.
- Never make your mortgage payments to anyone other than your mortgage servicer. If
you can't pay, contact your servicer immediately to work out payment arrangements.
- Take your time and never sign a contract under pressure. Consult a lawyer or trusted
family member before you sign.
- Get all promises in writing. Many scam artists make lofty verbal promises but never
put them in writing. Always make sure oral agreements are included in a written
contract; otherwise they are not guaranteed.
- Check companies’ reputations before doing business, by researching their reputations
with the Better Business Bureau and the Ohio Attorney General’s Office to see
if other consumers have filed complaints against them.
- Never sign away ownership of your home without consulting a lawyer. Be especially suspicious
of offers to lease back your home, in order to buy it back over time, and beware
of any home-sale contract in which you are not formally released from liability
for your mortgage. Make sure you know the rights you are giving up and that you
agree to give them up.
- Don't sign anything with blank lines or spaces, as information could be added later
without your knowledge and consent.
- If you do not speak English, never use a "rescuer's" translator. Instead, insist
on using your own translator.
Sources: BankRate.com,
HUD, The National Consumer Law Center,
Ohio Attorney General