Foreclosure Rescue ScamsPart 5) - "Do's" that will help you avoid being scammedThis is a very long list... Avoiding foreclosure rescue scams is important enough for some serious reading... 1) Do be pro-active with your lender. That means, if you see financial trouble in the near future, notify your lender ahead of time and try to make arrangements with them. You may save your credit and your home. 2) Do respond promptly to communication from your lender. If you have received a deficiency notice, you can still take care of your debt. Call your lender and discuss your options: repayment plans, forbearance, refinance, loan modification, short sale, etc. 3) Do stay level-headed. Even if you have received a "notice of sale" with the date your house will be sold at auction, get a time-line in mind and start making a plan. Begin by contacting your lender and discussing your options. They are listed above in #2. 4) Do take a few days to review paperwork before you hire anyone to help you with your foreclosure. 5) Do get copies of everything you sign. 6) Do find your own help if you need legal advice, a translator, an inspection, survey, or appraisal of your home. If you are working with a foreclosure rescue scammer, they will set you up with other people that are in on the scam. 7) Do read any new paperwork that is introduced into the transaction. 8) Do turn to trusted friends and family if you cannot afford a professional review of your paperwork. (Free services are available – check the "List of Legitimate Resources for Help" in this book.) 9) Do ask for references when you are approached and follow through on checking them. 10) Do contact state, county, or city consumer agencies to make sure your "specialist" is licensed. 11) Do get everything in writing – Item #11 in the "List of Legitimate Resources for Help" is a must. 12) Do always handle paying your mortgage payments yourself. 13) Do be suspicious of anyone who comes knocking on your door or who approaches you by phone, flyers, mail or e-mail. 14) Do follow up with the person who referred them to you. They may say someone you know sent them to talk to you. It's easy enough to check on a story like that. 15) Do be vigilant, if your house sells, to make sure you are released from the mortgage. The sale of your home does not always cut your ties to the mortgage. Contact the lender after the sale to make sure that you are free and clear of the loan. 16) Do continue contact with your lender even after you hire a specialist. It is your best way to make sure he is doing his job. 17) Do contact the sheriff's office to ask if surplus funds are available if your house sells at auction. 18) Do be suspicious of anyone who keeps you in the dark about how things are going with the lender. 19) Do arrange face to face meetings before you hire anyone. 20) Do research anyone who asks for your personal information. To conduct your own background check, do a google search typing the name of the person or the company (for example: ABC Foreclosure Angel) and the word complaint and/or scam. It will look something like thisABC foreclosure angel complaint scam You can request a free Reliability Report on them from the Better Business Bureau as well. Your state's Attorney General, Real Estate Commission, or the local District Attorney's Consumer Fraud Unit are additional resources for conducting a background check. 21) Do use an escrow payment service when making payments towards bringing your mortgage back to current status. That way you can make sure that your lender has received your payment and given you credit for it. This is a safety measure that can deter a lot of scammers. 22) Do walk away from "fluffy" sounding deals that offer "extras" like vacations, cars, free rent, shopping sprees, or cash "refunds" to you. 23) Do be cautious of any "guarantee" to stop foreclosure in days or to find a buyer for your home within a specified amount of time. 24) Do be informed of recent sale prices in your area to avoid letting your house be sold too cheaply. 25) Do be honest with you lender about your income, your debt, your credit history, and where you are getting your down payment. 26) Do make sure you have an accurate assessment of your financial situation. Some people assume that they are in "foreclosure" if they miss a mortgage payment. A "deficiency notice" is not a foreclosure notice. It is a warning, but you still have a chance to catch up on your mortgage with no further action or complication. If you are in foreclosure, you will receive a "foreclosure notice" or a "Notice of Trustees's Sale". If you receive these documents, you are in danger of losing your home. But this is why communication with your lender is so important. A phone call to your lender or bank will reveal whether or not you are in foreclosure. 27) Do retain services of established businesses in your community. If someone has been in the same business for at least five years, has an office you can go to, and you can check on them easily, this is the person to hire. If you cannot find anyone locally, ask an established real estate firm to refer you to someone. They may even have someone on staff that can help. 28) Do take notes. Take notes when you talk to your lender on the phone. Take notes with names and dates. Take notes and write questions when you are reading over paperwork. This will keep things honest. 29) Do get an accurate timeline of the foreclosure process. Once you receive a "default notice" the countdown starts, and you are approximately four months from the sale of your house on the court house steps. There will be more than one deadline along the way if you want to save your home. Make sure you know the exact date when your ownership legally terminates. 30) Do make sure that you are not counting on a verbal agreement. This is just another way of saying, "Get it in writing." (#11 on this list) 31) Do make sure you understand numbers and time tables when getting a new loan. The main numbers you want to double-check are: monthly payment (including all p.m.i. amounts and escrow amounts), interest rate, whether the rate is fixed or adjustable, and the length of your loan term (15, 20, 30 years, etc.) All amounts should be substantiated, because you only want to pay what is required. Dishonest lenders will load their loans with expensive fees and "products" that are not necessary and not required. I do not recommend adjustable rate mortgages, but if the rate is adjustable, you want to get a "worst-case scenario" of your maximum possible payment upon adjustment. You want to know the adjustment schedule (when your payment will start adjusting and how often it will adjust), and you want to make sure there is a cap (a limit) on your interest rate adjustment. You also want to make sure that you are not signing on for an interest only loan, or a negative amortization loan (a loan balance that increases every month due to "deferred interest" -explained in "Refinance Scam" - #2 of the Dirty Dozen). Make sure you get copies of every document you sign. Keep all paperwork together and organized. 32) Do seek information about the laws governing foreclosure in your state. Knowledge is the best way to arm yourself against the lies and half-truths of scammers. 33) Do think about hiring an attorney. Lawyers are expensive, but a lot less expensive than a scam artist who steals your money, your equity, and sometimes your home. 34) Do contact certified counseling agencies. Many legitimate counseling agencies are nonprofit and offer free financial counseling. 35) Do beware of scammers posing as "free" financial counselors. They will tell you that their services are free, but that they have to collect lender penalties, assessments, taxes, and/or fees for other parties involved like the lender, attorney, appraiser, etc. 36) Do check out free counseling services at www.hud.gov HUD is the Department of Housing and Urban Development, a branch of the Federal Housing Administration. 37) Do stay away from web-based foreclosure rescue services. It is easy for scammers to abandon the site by the time officials catch on. The scammer just sets up another site under another name and starts fresh. 38) Do list your home for sale yourself, or employ the services of a reputable real estate agency if you decide to sell. 39) Do be on guard when approached by contractors offering home repairs and renovations. Find local, reputable contractors. Good contractors don't need to go door-to-door to find work. People who approach you could be operating scams designed to maneuver you into taking out a bad home improvement loan with the hopes of forcing foreclosure. If you do opt to perform home improvement, follow all the tips given for checking out services. And get written estimates from at least three contractors before you decide who to hire. 40) Do check to see if you qualify for free (also called "pro bono") legal services. Start your search at www.legalaid.org 41) Do check into a FHA (Federal Housing Administration) loan if you want to refinance. The qualification guidelines are less strict and the down payment requirement is lower. More information is available athttp://www.hud.gov/fha/choosefha.cfm 42) Do follow up on any e-mails asking for confirmation of your personal info (social security number, bank account numbers, etc.) to make sure the e-mail is legit. If you cannot verify the source, you should assume the e-mail is fraudulent. The same goes for items you receive in your mailbox – letters, postcards, flyers. The same goes for ads you see on TV, roadside signs, or cars that have ads on them. Always check them out before you give them your personal info.
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