Foreclosure Scams

By Janice Lieberman of the Today Show

Aside from your health there is nothing more important than your home. It’s where we raise our children, spend our holidays and know that we have a place to call our own when we are old and gray. If you are fortunate enough to own your own home, you know that you have an investment in your future. The problem is the cost of real estate gets more and more costly. Keeping up with mortgage payments in a tough economy is challenging.

The Better Business Bureau estimates that 1.7 million people could lose their homes to foreclosure over the next several years. That’s a frightening and devastating number but becomes very real when it happens to someone you know.

I met a woman who because of a disability could not keep up with her mortgage payments. She had a teenage son living with her. She had purchased the home from her parents. It was the home she grew up in and had hoped to live to see the day when her grandchildren would come to visit. When she realized her house was about to be taken back by her bank, she panicked.

And just then, as if an angel were listening, she received a letter from a company telling her they could get her out of her financial trouble and save her home. She was thrilled. She met the owner who said that if she gave him 950 dollars he would intervene with the bank and get her out of her financial mess. She borrowed money from her family to pay this company. Three weeks later, she found out that her home was put up on auction. She was forced out. The company, which promised to end her nightmare, did nothing and kept her money. She now lives in a rundown one-room basement apartment with her 17-year-old son.

As she soon found out, she was scammed. There are companies that call themselves “rescue companies.” They get a list of homeowners who are about to lose their homes and send what seem to be personal letters making promises they cannot and do not intend to keep.

The Better Business Bureau says these companies are popping up across the country. Some have been shut down by local attorneys general and have re-opened in states that are not as stringent.

So here are some tips to make sure you don’t become a victim of these slick marketers who prey on those who can least afford to lose money.

Don’t be fooled by companies who promise to intervene with your lender and save your house.

Don’t sign away your rights to speak to your own lender. Try to make a deal with your bank to make some kind of reduced payment.

Never make a mortgage payment to anyone but your lender.

Don’t be pressured to sign a contract. Have a lawyer check it out first.

Don’t trust unsolicited mail or flyers.

Check out the company with the Better Business Bureau.

Watch the Today Show segment with Janice Lieberman