Going through a foreclosure is bad enough. It makes you feel desperate. You want to grasp at any lifeline for help. There are a variety of organizations that can help you. But this also makes a fertile ground for scams.
How do they find you?
Whenever a lending institute files a foreclosure, it becomes a public record. Individuals mine those records and sell the names and addresses. Scammers buy those lists and send out mass mailings or cold call. They will claim to “guarantee a loan modification” or “stop your foreclosure.” They will ooze sympathy in the hopes of finding someone desperate enough to buy their services.
Mortgages Assistance Relief Services
The Federal Trade Commission has created a Mortgages Assistance Relief Services (MARS) Rule to protect homeowners from scams. MARS prohibits making false claims or collecting advance fees. No company can guarantee a loan modification or stop your foreclosure. Only the lending institute can make those guarantees. Anyone providing mortgage relief services CANNOT collect a fee until they have provided the customer with a written offer from a lender AND the consumer has decided to accept.
Ways around the rules
There are two ways scammers get around advanced fees. First they “sell” other services. To start the process, the scammers would sell a forensic accounting of the customer’s finances. This is nothing more than a peek at the customer’s finances and a quick way to get some money. Another way to collect a fee is to use an attorney. An attorney can charge a fee because they are engage in the practice of law and they are licensed in the state. The attorney must, however, place all the money in a trust account.
Protect yourself
Unfortunately, as hard as it is to believe, attorneys can be corrupt. What is the old joke, 99.9% of all attorneys give the rest of us a bad name. Before signing up with an attorney, web search their name. Also go to www.avvo.com to see if there are any comments about the attorney. In Florida, go to www.FloridaBar.org and search to see if they are an attorney in good standing. A little due diligence could save you a lot of headache in the future.
More information on foreclosure scams
For more information on scams, go to the FTC consumer website: http://www.consumer.ftc.gov/articles/0100-mortgage-relief-scams