What is foreclosure rescue scam and how to avoid it?

While thousands of homeowners struggle to save their houses from foreclosures, for many the battle doesn’t end there. Several homeowners fall into what you may call foreclosure rescue scams.

Such rescue scams are of 3 types:

1. The Service Scam where the homeowner pays fees for the scam artist to work out things with the mortgage company with whom he’s dealing.
2. The Buyout Scam where the person pretending to rescue the homeowner purchases the property and rents it back to the owner.
3. The scam artist convinces the homeowner into signing off a quitclaim deed or forges his name on a deed.

Here’s a story that speaks of foreclosure rescue scam involving deeds

Diana was behind on her mortgage just like many others in her county. But she felt she was lucky to have her friend Dorothy who came to her help. Dorothy said her husband William could help Diana save her house from being foreclosed.

According to William, Diana should first of all take her ex-husband’s name off the deed. So, William took Diana to an attorney and made her sign an agreement for the attorney’s services. Besides, he also made her sign a quitclaim deed on her home.

However, right after 3 days of signing the quitclaim deed, Dorothy and her husband filed a quitclaim on the house. And to Diana’s surprise when she came back home from work, what she got to see was all her belongings thrown in the yard and 3-4 men inside doing some repair work. Diana was sure that William didn’t mention she was quitclaiming her home when she signed the deed. Nor did she see any document as “Quitclaim Deed”.

Above all, Diana has asked for copies of all the docs the day she signed them but she was never given a copy of the quitclaim deed which stated that she was giving away her property to William and Dorothy. She realized that she was a victim of foreclosure rescue scam. Diana now rents an apartment with her son who is disabled and pays $125 more a month than she was paying for her mortgage on her own home!

Dian isn’t alone to have gone through such a scam. There are many out there struggling and doing that every bit to keep their homes but finally ending up in losing their homes not to their mortgage companies but to scam artists.

How to fight out such scams:

The only way to fight out foreclosure rescue scams or should I say any scam is to be an educated consumer. When you’re a victim of scam, the best thing is to contact an attorney asap and then call up the Office of Financial Regulation at 1-800-848-3792 so that they’ll start investigating. However, don’t expect to get back your home even though the scam artist may be punished if he is proven guilty.