How to avoid foreclosure prevention scams

With foreclosures rising rapidly, the scammers are coming out of the woodwork. They have several ways to separate you from your money and your house:

  • One is to have you sign over title to your house and lease it back. They promise to give you your house back when your credit has been repaired and you can remortgage at a lower rate. It almost never happens. Usually they end up evicting you.
  • Another scam is simple. “Give me $1,000 and I’ll fix your mortgage problem by negotiating with your bank.” These people almost always fail (if they try at all) and you have lost whatever you paid them.

There are three things you can do that actually work.

1. One is to negotiate directly with your lender. We have discussed this in other entries.

2. Another thing you can do is to work with non-profit foreclosure prevention services that do not charge you a fee. One is NACA. For more info on this group, scroll down through December entries.

Another group is national Consumer Credit Counseling Services. There is more about them in our archives.

3. A third thing you can do is to file Chapter 13 bankruptcy. This will definitely freeze your foreclosure proceeding while you work with the lender under supervision of the court. We have extensive information on bankruptcy in our archives.

For more information on bankruptcy, click here.

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