When you bought your house you had a good job, and even  though the mortgage payments were high, you weren't worried. Now you have received a pink slip, and the mortgage payment takes up most of your unemployment benefits.


You know that the government has some new programs to help people like you, but all of the information is so confusing. Does it make sense to spend money for a mortgage consultant to help you avoid foreclosure?

While it always is good to have someone to help you navigate through the fine print, be careful not to fall prey to a new type of opportunistic scammer who can take your money, your credit rating, and possibly even your house. Mortgage foreclosure rescue scams are on the rise across America as the economic downturn deepens. These scammers count on homeowners being vulnerable and desperate. While they claim that they can give homeowners options that will allow them to refinance their house, or to “repair their credit” once they fall into foreclosure, in reality they are really intent on taking your money. 

 Warning Signs That You May Be Dealing With A Mortgage Foreclosure  Scam Operator:

• Demands a fee in advance. No legitimate organization that works with borrowers to avoid foreclosure will ever ask for money up front.
• Makes unsolicited offers or “lofty” advertisements, claiming they can help save your home.
• Recommends you break off contact with the lender and any counselor that you may have been working with.
• Advises you to stop making mortgage payments.
• Tells you to send your mortgage payment to anyone other than your loan servicer.
• Instructs you to transfer ownership of your property.
• Makes verbal promises that aren’t put in writing.
• Asks you to sign a document that has blank lines or spaces
  

It is important that you take action by contacting your mortgage lender to find real options to avoid foreclosure. You can also contact a legitimate counselor through an agency that provides free counseling services to homeowners who are having trouble making their mortgage payments. Legitimate options may exist, and these agencies can help you explore your options.

Tips to protect youself from Becoming a Victim of Mortgage Fraud:

Most Important:

GET REFERRALS for real estate and mortgage professionals.
CHECK THE LICENSES of the industry professionals with state, county, or city regulatory agencies.

Remember that if it sounds too good to be true, it probably is. An outrageous promise of extraordinary profit in a short period of time signals a problem.  Don't let a lender tell you that he has a "deal" only for you.

· Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques.  Most offers to "save" homeowners who are at risk of defaulting on loans or whose houses are already in foreclosure are not legitimate.

 · Shop for a lender and compare costs. Beware of lenders who tell you that they are your only chance of getting a loan or owning your own home.

· Look at written information to include recent comparable sales in the area, and other documents such as tax assessments to verify the value of the property.

· Understand what you are signing and agreeing to--If you do not understand re-read the documents, or seek assistance from an attorney.

· Make sure the name on your application matches the name on your identification.

· Review the title history to determine if the property has been sold multiple times within a short period--It could mean that this property has been "flipped" and the value falsely inflated.

· Know and understand the terms of your mortgage--Check your information against the information in the loan documents to ensure they are accurate and complete.

· Never sign any loan documents that contain blanks--This leaves you vulnerable to fraud

 STAY AHEAD OF THE SCAM...STAY SMART!

Adapted from information at http://www.fbi.gov .

If you think that you might be a victim of a scam:

• Contact a lawyer right away. Lower income individuals may be able to find free legal services at: http://www.findlegalhelp.org.



• If you believe that you are the victim of criminal activity, such as forged documents being presented for your signature, you should contact your local law enforcement agency

The FTC produced a video on how to avoid scams as part of its inter-agency crackdown, dubbed "Operation Loan Lies," which can be watched and downloaded at www.ftc.gov/YourHome.

Where to Find Legitimate Help

If you’re having trouble paying your mortgage or you have gotten a foreclosure notice, contact your lender immediately. You may be able to negotiate a new repayment schedule. Remember that lenders generally don’t want to foreclose; it costs them money.

Other foreclosure prevention options, including reinstatement and forbearance, are explained in Mortgage Payments Sending You Reeling? Here’s What to Do, a publication from the FTC. Find it at http://www.ftc.gov.

FDIC Foreclosure Prevention Website:   http://www.fdic.gov/foreclosureprevention      
Call:  (877) ASKFDIC or (877) 275-3342

Mortgage Modification and Refinance Programs:

 Making Home Affordable http://www.makinghomeaffordable.gov/
 HOPE for Homeowners (H4H) http://www.portal.hud.gov/
                                          (800) CALL-FHA or (800) 225-5342
Foreclosure Mitigation Assistance and Counseling  U.S. Department of Housing and Urban Development http://gov/offices/hsg/sfh/hcc/fc or http://www.hud.gov
                     (800) 569-4287
Homeownership Preservation Foundation http://www.995hope.org
                     (888) 995-HOPE
NeighborWorks America http://www.findaforeclosurecounselor.org/  
                                           http://www.nw.org/network/home.asp

To learn more about mortgages and other credit-related issues, visit www.ftc.gov/credit and http://www.MyMoney.gov, the U.S. government’s portal to financial education.