SanDiegoShortSale.TV | Foreclosure Scams
As we continue to see a growing supply of new foreclosures hitting the market, we are also seeing a large number of new foreclosures scams popping up. I have noticed that homeowners are very reluctant to let you conduct BPO’s (Broker Price Opinions) on their properties, even thou many of them are applying for loan modification programs. This is due to the countless efforts of con artist trying to take advantage of an unfortunate situation. There are many articles online talking about the different tactics these con artists are using to attack distressed homeowners. They will approach you in person, by mail, over the phone, or by email. It makes it hard for the homeowner to trust anyone because many of these con artists are advertising on television, radio and the Web. This makes it more believable to the consumer and can easily be misconstrued for a legit operation. Beware for advertisements stating “foreclosure consultants,” “mortgage consultants,” offering “foreclosure prevention” or “foreclosure rescue” services. The OCC (Office of the Comptroller of the Currency describes 10 common scams these con artists are performing and ways to protect yourself. Here are 5 of the most common scams used:

1. Foreclosure “rescue” and refinance fraud. The scam artist offers to act as an intermediary between you and your lender to negotiate a repayment plan or loan modification and may even “guarantee” to save your home from foreclosure.

2. Fake “government” modification programs. Unscrupulous people may claim to be affiliated with, or approved by, the government or may ask you to pay high up-front fees to qualify for government mortgage modification programs.

3. Leaseback/rent-to-buy schemes. In this type of scam, you are asked to transfer the title to your home to the scammer, who will, supposedly, obtain new and better financing and/or allow you to remain in the home as a renter and eventually buy it back.

4. Bankruptcy scams. You may have heard that filing bankruptcy will stop a foreclosure. This is true — but only temporarily. Filing bankruptcy brings an “automatic stay” into effect that stops any collection and foreclosure while the bankruptcy court administers the case. Eventually, you must start paying your mortgage lender, or the lender will be able to foreclose. Bankruptcy is rarely, if ever, a permanent solution to prevent foreclosure.

5. Debt-elimination schemes. Scammers may claim to be able to “eliminate” your debt by making illegitimate legal arguments that you are not obligated to pay back your mortgage. These scammers will provide you with inaccurate claims about applicable laws and finance, such as that “secret laws” can be used to eliminate debt or that banks do not have the authority to lend money. Do not stop making payments on your mortgage based on their claims.


There are many different ways you can protect yourself from these scams and the first thing you must always do first is to contact your lender or mortgage service. They well help guide you through the process and offer a wealth of knowledge. Always proceed with caution when dealing with anyone offering to help you modify your mortgage or avoid foreclosure. There are 9 more step you can take to protect yourself, they are:

1. Make all mortgage payments directly to your lender or to the mortgage servicer. Do not trust anyone to make mortgage payments for you, and do not stop making your payments.

2. Avoid paying up-front fees.

3. Know what you are signing.

4. Do not sign over your deed without consulting a lawyer you select.

5. Get promises in writing. Oral promises and agreements relating to your home are usually not legally binding.

6. Report suspicious activity to relevant federal agencies, such as the Federal Trade Commission, and to your state and local consumer protection agencies. Contact the OCC’s Customer Assistance Group by calling (800) 613-6743, by sending an e-mail to customer.assistance@occ.treas.gov, or by visiting www.HelpWithMyBank.gov.

7. Apply for a government-sponsored loan modification or refinancing. Go to this Web site for information on these federal mortgage modification and refinancing programs: www.makinghomeaffordable.gov

8. Contact a legitimate housing or financial counselor to help you work through your problems.

9. Visit the following Web sites for further information:

o The OCC’s consumer information site for banking-related questions: www.helpwithmybank.gov

o OCC Customer Assistance Group and consumer assistance site:www.occ.gov/customer.htm

o Federal Trade Commission:www.ftc.gov/bcp/edu/pubs/consumer/homes/rea04.shtm

o Federal Reserve Board:http://www.federalreserve.gov/pubs/foreclosurescamtips/default.htm

o Neighbor Works America:www.nw.org

o HOPE NOW: www.hopenow.com


In addition to ways to protect yourself from these scams, there are 10 warning signs that you must be aware of. They include:

1. “Pay us $1,000, and we’ll save your home.” Be wary of companys asking for money up-front before any work is done.

2. “I guarantee I will save your home – trust me.” Watch out for guarantees from any person or company.

3. “Sign over your home, and we’ll let you stay in it.” Beware if someone offers to pay your mortgage and rent your home back to you in exchange for transferring title to your home. Signing over the deed to another person the power to evict you, raise your rent or sell the property.

4. “Stop paying your mortgage.” Anyone who tells you to stop paying your mortgage is out of their mind.

5. “If your lender calls, don’t talk to them.” Your lender is the most important contact you have when faced with a foreclosure. They can help you negotiate for a repayment plan, modification, or short sale.

6. “Your lender never had the legal authority to make a loan.” People who say they have the “secret law” or “secret information” about how your mortgage contract maybe declared invalid are blatantly lying to you.

7. “Just sign this now; we’ll fill in the blanks later.” Read everything and never sign paperwork that you don’t understand.

8. “Call 1-800-Fed-Loan.” This can be a trick number making you believe that they are tied into the government when really they are a private company trying to scam you. All you need to do is to contact your lender.

9. “File for bankruptcy and keep your home.” Bankruptcy only temporarily stops the foreclosure process. Scammers use this approach to make you believe that they temporarily stop the foreclosure process by negotiating a plan with your lender when really they filed bankruptcy in your name.

10. “Why haven’t you replied to our offer? Do you want to live on the streets?” High-pressure tactics signal trouble. If someone continually contacts you and pressures you to work with them to stop foreclosure, do not work with that person. High-pressure tactics signal trouble.

As a result of all the foreclosures on the market and more on the way, homeowners need to beware of the potential harm that these con artist can cause. Here at SDSS.TV we strive to build our business with our clients best interest first. Information is the key to being better positioned when faced with life’s challenges.