People will do just about anything to avoid their home being foreclosed upon. This leaves them vulnerable to common foreclosure scams, which prey upon a person’s fervent desire to retain their home. Foreclosure scams come in all shapes and sizes, which makes it difficult for homeowners to identify them when they lack the proper information. PennyMac explains a few of the more common scams and how they work so you can be sure to avoid them.
In some cases, you’ll be offered a new mortgage loan with a lower interest rate to take the place of your current one. You’ll be asked to fill out paperwork which is claimed to be for the new loan. However, this paperwork is actually being used to transfer the deed for your home to the other person. Once they have ownership, you’ll be evicted and the home will be in their possession. Additionally, you’ll still be obligated to pay back your existing mortgage loan, leaving you even more at odds financially than when you began.
You may also be offered a loan modification, which promises lower payments and less interest. While there are legitimate loan modification companies out there, others are simply employed to collect your money under false pretenses. You’ll be asked to remit a fee as well as payments to get the process started. This money is not going to your lender, but the scam artist, who will often disappear once enough money has been collected.
Regardless of the specifics of the scam, there are a few common components among them. Scamsters often request that you don’t contact your lender or that you cease making payments. Promises of assistance are often too good to be true. They may claim to offer unbelievable interest rates or monthly payments, which is backed up by claims that they have a strong working relationship with your lender. Regardless of what’s said, trust your instinct. If you’re having trouble paying your mortgage, contact your lender right away. If you want to seek other options, like bankruptcy, contact an attorney with experience in this area.