Fast growing “Foreclosure Rescue” industry often just another scam

You are threatened with foreclosure and you see an ad or get a letter from someone who says they can help.  You call them up and you might hear one of several different pitches.  Probably the most common is what is called a “sale and lease back” deal.  All you have to do is sign over your home to the other party.  They promise to pay your mortgage for you.  Meanwhile they will lease the house back to you at a rate you can afford until you can buy it back from them.

This can be legal and is workable in some cases, but all too often it is a scam.  In one case I am aware of, as soon as the house was signed over to the rescuing party, they resold it, kept the money and disappeared.   The old owner was evicted by the new owners.

In other cases the person to whom the house was signed over simply keeps the money you send them every month and fails to pay the mortgage, so the lender continues foreclosing.

In some cases foreclosure rescuers simply charge you an upfront fee to renegotiate your mortgage.  They convince you they can make the lender be reasonable.  You give them some money and they may or may not make a half-hearted attempt to renegotiate your loan; but they seldom succeed.  And they keep your fee.

There is a long list of non-profits that will do this service for you free of charge.  F irst, there are local organizations in every state, financed by HUD, that will help you with foreclosure prevention. http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm.

There is also at least one national organization offering to help you avoid foreclosure: Homeownership Preservation Foundation, (”HPF”). The HPF counseling services are available to any consumer who is facing a possible foreclosure of their home mortgage. Dial 888-995-HOPE (4673)   or www.995hope.org. All assistance is free.

There are many other ways for these foreclosure rescue scammers to use your situation to their own advantage, leaving you worse off than you were before you met them.  If you are tempted to use these people, make sure you get your own trustworthy lawyer involved in whatever you do.

Also see our main site article on how to Prevent Foreclosure.

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