Foreclosure rescue scams: You DON’T get what you pay for

neighborhoodAs with any crisis, the scam artists are eager and ready to take advantage of unsuspecting consumers. They rushed into action soon after the housing market collapsed. In this situation, “You DON’T get what you paid for.”

In many states, it’s illegal to take money upfront to modify or work-out a loan. States that didn’t have these laws at the beginning of the crisis, like California, are now rushing to pass them.

Consumers are falling for these foreclosure rescue scams because they are desperate to save their home. You’ve probably heard me tell you that you “get what you pay for” meaning don’t necessarily jump the gun and pick the lowest bidding contractor. He may be cheap for a reason.

money angle In this case, paying someone to modify your mortgage probably won’t get you any farther than if you use one of the government’s free, HUD certified housing counselor.

These companies lure you in with the promise that they’ll save your home. Many just shuffle paper around and don’t do a whole lot to help you. They just lead you on and drag out the process.

Don’t pay these companies thousands of dollars upfront to help you out. Ignore their offers, and choose the free help instead.

See my previous post with listings of free, certified housing counselors.

Be leery of someone who “guarantees” they’ll modify your loan or save your home. There are no guarantees in this process. Also, don’t take the advice that you should stop paying your mortgage. That is not a good practice. Make sure you read everything you sign.

Loan Scam Alert is a good website that keeps you up to date on the latest ways these rescue companies are morphing so they can take your money.

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