Credit Basics
Artists Prey on Foreclosure Victims, How to Avoid being Scammed; Tips from Consolidated Credit Counseling Services, Inc.
"The best thing that people can do is to educate themselves on foreclosures. They must understand their rights as homeowners and not rely on a stranger's advice."
Foreclosure filings nationwide increased by 60% and the housing situation doesn't look like it will stabilize in the near future. When people are desperate, frightened and are rapidly losing hope, scam artists come crawling out from under the rocks. Scammers are heartless and they will use every dirty tactic to get people to sign a document. Experts from ConsolidatedCredit.org help consumers discover the scams and how not to fall prey.
When someone is facing foreclosure they shouldn't trust people who tell them that they can get quick cash for their home or fast refinancing without any hassle.
Scam artist are coming out of the wood work offering a smile and a solution; a guarantee that the misery will soon be over for those going through foreclosure. "Everyone has seen the signs: "We buy Homes" and similar declarations. These people are known as foreclosure "rescuers" and they are not there to rescue anyone, but rather to help them drown," says Howard Dvorkin, founder of Consolidated Credit Counseling Services and author of Credit Hell: How to Dig out of Debt.
Types of Scams
Phantom help scam: The so-called "rescuer" will charge people
exorbitant fees for making simple phone calls and for filling out forms and other
paperwork that they homeowner could do on their own. "They make it seem much too
difficult for people to do on their own and they want people to rely on them, to
trust them. They give people a false sense of security, but nothing gets resolved
and they end-up lose their money," Dvorkin stated.
The bailout scam: The "rescuer" convinces a person to sign over the title to their house with the promise that he or she will be able to stay in the house as a renter, with the option of buying back the house. The problem is that the terms of the buy-back are much too difficult for almost anyone to financially manage. In the end the person eventually loses everything and the scam artist walks away with the majority of the revenue.
The bait-and-switch scam: In this scam a person is led to believe
that they are signing papers that will bring their
mortgage current, but they are actually
surrendering the ownership of the home. Before they know it they get evicted and
the scam is complete.
One of the reasons people fall prey to foreclosure scam artists
is because they feel shameful about their situation and want to remedy it at all
costs. This leads to making rash decisions and poor judgments. The following are
some tips from Howard Dvorkin to avoid getting scammed:
-- When a person gets entangled with someone who claims that
they are helping them he or she shouldn't sign anything. Keep a clear mind. People
need to look over the documents and get as much information as possible. Get a lawyer
or a friend to help and be certain to talk to your mortgage representative.
-- Don't sign forms that say a person can rent or lease their
own home and have the option of buying it back. Consult a lawyer or friend because
these deals are usually dirty.
-- If someone is in foreclosure trouble they should contact
their lender. Don't ignore warning letters. It is better to be up front with a lender
as they may be able to offer assistance.
-- Never make mortgage payments to anyone but your lender and
don't ever sign-off on a deal that switches your mortgage lender without going through
the normal refinancing or modification procedures.
-- If someone presents a person with documents or a contract
with blank lines they shouldn't sign it. Those lines can be manipulated at a later
time when that person is not present.
"The best thing that people can do is to educate themselves
on foreclosures. They must understand their rights as homeowners and not rely on
a stranger's advice," advises Dvorkin. Counselors advise people to immediately speak
with their lenders and let them know what their situation is because most have programs
in place to help their mortgage customers.
For more information on personal finance issues please visit
http://www.consolidatedcredit.org/.
ABOUT CONSOLIDATED CREDIT COUNSELING SERVICES. INC. - Consolidated
Credit Counseling Service's mission is to help people end financial crisis and solve
money problems through education and professional counseling. Consolidated Credit
is an industry leader that provides credit counseling and debt management services
throughout the
