Foreclosure "Rescue" Specialists
Let's say you've gotten behind on your mortgage payments, and in spite of your best efforts, the bank has sent you a notice of foreclosure. You're in danger of losing your home. You're worried, you're stressed, you don't know what to do. Suddenly, as if in answer to your prayers, there's a knock on your door and a stranger introduces himself as a foreclosure rescue specialist. And he's going to save your house. The truth is, though, these guys are not the answer to anybody's prayers. And unfortunately, at DebtStoppers, we have to deal with the damage they cause every day.
How foreclosure scammers operate
When the bank forecloses on a property, it issues a public notice in a local Chicago newspaper. This is how the "foreclosure specialist" gets your name. They also send out fliers urging Illinois homeowners in financial trouble to contact them. But no matter how it starts, it usually ends with your loss of your house.
This scam works in one of two ways. In the first, the "specialist" tells you that for a fee, he'll negotiate with your mortgage lender to get your payments lowered and stop the foreclosure. In the meantime, he tells you to send your mortgage payments to him, not the bank. What usually happens then is he does nothing for you and tells you that the payments you've make are his "fee" — and the bank goes ahead with the foreclosure. By the way, you should know that you can negotiate with your bank yourself and probably do just as well as any so-called specialist.
In the worst case, the specialist offers you a loan to save your home. Unfortunately, in most cases, what he calls the loan is not really a loan. Instead, unbeknownst to the homeowner, the so-called specialist actually buys the house for much less than the fair market value and gives you just enough money to make the mortgage payments current. Moreover, because the specialist does not agree to pay off or assume your mortgage, you're still responsible for the mortgage but no longer own the property. In some instances you're given a limited period of time in which to buy back the house from the specialist for a sum substantially in excess of the mortgage — and usually more than the foreclosure rescue specialist paid for the home in the first place.
And if you want to stay in the house, you now have to pay rent to the new owner, the foreclosure rescue specialist. That's right, the guy who came to help took your house.
To avoid being scammed:
- If you are having problems making your mortgage payments, call or write to your mortgage lender immediately. Be honest about your financial situation. Ask about renegotiating your loan or working out a payment plan. The sooner you contact your lender, the easier it will be to work out a solution.
- Common sense should tell you never to do business with anyone who comes uninvited to your door, who calls you on the phone or whose name you find on a flier.
- Never sign any papers without reading them and never enter into any agreement — especially if it involves your home — without consulting your own lawyer.
Steer clear of scammers with DebtStoppers
To learn the truth about foreclosure and your best tactic to fight it, call us today at 800-440-7235, or contact our Chicago office online.