Foreclosure Scams: Don’t Get Your House Stolen

You could be a prime target for foreclosure scams

Foreclosure scams can literally rob you of house and home, as well as ruin your credit, and destroy your finances. If you are a homeowner with fears of not being able to keep up with mortgage payments, or are otherwise desperate to sell your home, you are a prime target for foreclosure scams.

This form of fraud is perpetrated by con artists, who promise to help you save your home or get bankruptcy protection, while actually stealing your money and/or home, and doing nothing to prevent your eviction.

What are some of the signs that can help you recognize foreclosure scams? They are the same for most schemes to con you out of your money:

1. The “solution” is complicated and difficult to understand.

However, you are pressured to trust in the expertise and honorable intentions of your “rescuer,” and go along with it anyway. Unscrupulous individuals will often claim affiliation with government mortgage modification programs in order to gain your confidence.

Here’s a tip-off: Legitimate government programs do not a charge fee for your participation.

2. You are asked to sign blank documents or documents with incomplete or false information.

This includes asking you to sign fake foreclosure rescue documents. Being advised to lie or otherwise falsify information is another major red flag. Never sign any document that you have not thoroughly reviewed and do not completely understand, especially if it is provided by anyone other than your mortgage lender.

And never give in to pressure to sign immediately. Insist on taking ample time to not only read the documents, but to review them with your mortgage lender, a real estate attorney, a trusted and knowledgeable family memberbut not anyone recommended by or affiliated with your “rescuer.”

3. Your “rescuer” plays on your feelings of victimization and desperation.

They will often harp on the unfairness of your situation. Scammers also even appeal to you based on racial solidarity (they’re just trying to help “our people”) or religious grounds (for example, they want to be “a blessing” to their fellow Christians).

4. The “rescue” is unsolicited.

It could come by mail, email, a phone call, or a direct approach from a stranger. In other words, you didn’t reach out to them; they found you. While dishonest individuals and companies may advertise their “services” online and in local publications, they will often find you by simply checking foreclosure notices, or targeting  you by religious or ethnic affiliation.

5. They graciously offer to negotiate on your behalf.

This may feel as if a major burden could be lifted from your shoulders, but you are actually being set up to have the rug pulled out from under you.

Alarms should go off in your head whenever an individual or company offers to negotiate with your lender, help you file for bankruptcy to stave off foreclosure, acts as an intermediary between you and your mortgage lender to refinance the loan, or advises you to temporarily sign over title of your house to them as they resolve your issues.

6. Deal only—and directly—with your mortgage lender.

The biggest mistake struggling homeowners make is ducking the lender, as opposed to informing them of potential problems immediately as they arise, to try to work out a solution that will help them keep their homes and maintain their mortgage commitment.

Once again, if it sounds too good to be true (miraculous, even), it nearly always is. The first people you should contact when you think you are in danger of defaulting on your mortgage is your lender.

For more on foreclosure scams and other types of housing fraud, check out Housing Scams at If you need to report a foreclosure scam, you may file a complaint by contacting the Federal Trade Commission (FTC). If the scam involves bankruptcy, contact a local U.S. Trustee office.