Monday, December 29, 2008

Foreclosure Scams

As foreclosures rise so will foreclosure scams. Some things to note that the debt consolidator is scamming you - you are asked to pay a significant fee for the services, you are asked to transfer the title over, they will resolve all your problems with little effort on your part. If any of those three are being offered - watch out!

The foreclosure scammers are there not there to help you - they just want to help themselves to your equity. Once what little you had left is gone - you will be too. This brings us to a video from CBS News that was with an article titled For Desperate Homeowners, Scams Abound. Lets watch -

Here are some snippets from the accompanying article -

The company's agreement promises that clients have "sufficient equity in your home" for "paying off debt liability," "repairing your current credit," and most importantly that they'll "remain in your home without further concerns or worries."

It's a classic foreclosure rescue scam, says attorney Debra Zimmerman.

"There should be a huge red flag for anybody who offers to do this for money, because there is no reason to pay for help," said Zimmerman, of Bet Tzedek Legal Services. "Loan modifications can be done for free."

In the typical scam, the homeowner transfers title to a third party who promises to secure a lower interest rate on the mortgage. But what often happens is the third party cashes out the home's equity, leaving the homeowner as a renter.

"This is the American dream, and they're losing it. And somebody is coming and they're going to rescue them," Zimmerman said. "[The scam] is very, very appealing."

Of course people want to do anything to save their homes. And with all the stress when faced with foreclosure it may be harder to notice the red flags of a scammer. Hopefully by Alexendria Craig sharing her story (from the video) there will be fewer people faced with the issues in the future. Hopefully.

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