There is nothing new about people seeking to profit from the misfortunes of others. In the current state of the US housing market, with a dramatic increase in foreclosures across the country, it's not surprising to see a new breed of fraudster, profiting from the foreclosure situation.
Empty Promises
Foreclosure scammers have taken advantage of the distress of homeowners who are facing foreclosure. Instead of helping them to save their homes, they offer false promise to take care of the foreclosure for them. They claim they can stop your foreclosure. All you have to do is pay them a small fee.
Watch Out For Approaches
The initial contact from these scammers may come in the form of a teaser letter in the mail. The letter explains how they can help you to stop your home foreclosure. They ask you to call on the phone for an appointment. You most likely wouldn't find them if you had gone searching in regular places for foreclosure advice.
The Promise
What these fraudsters generally promise is to solve the homeowner's financial problems. They make promises and offer guarantees that they will work with the lenders to stop foreclosure of your home.
All you need to do, is sign their documentation and pay the fee. In desperate times, when offered a plausible solution, most people won't look at the detail. As the saying goes, the devil is in the detail. Most people who get caught out haven't bothered to read what they are signing. After all it's technical / legal stuff and most people shy away from that. The documentation you just signed could be a legally binding contract. It may have you paying them a fee over and over again, or you may be signing your house ownership over to them.
It's About Money
Mostly, these fraudulent companies want your money. They not public benevolent organizations! It's about the money, and you are a target 'client'. They get you to pay an upfront fee when you sign the document. Then, guess what, you never hear from them again. Your foreclosure problems haven't changed, and you have less money for the fight that you need to engage in to save your home.
Some people have paid as much as $2000 to these scammers.
Don't Get Caught
If you're threatened by foreclosure, you're already vulnerable, so don't become a victim! The first and most important thing is to be sure to read the fine print. If you don't understand it tell them you want to have it checked over. If they resist or increase pressure to sign: get out of there!
Just stick to this principle: read the documentation in full including any small points before you sign. Second principle is beware of anyone who demands an upfront payment. In most cases, legitimate help from a foreclosure agent will not require upfront fees. In fact, some may not require payment of any kind.
Final Checklist
If you're ever in doubt about an offer you're being made, take your time and review it fully. There is no rush and you can afford to delay your decision if needs be. Consult with other foreclosure experts. Do some research after the salesman leaves. If someone insists on an upfront payment and / or your signature immediately, and especially if they do not want you to consult with others: that is a huge red flag.