Facing the threat of losing a home, a home owner will be plagued by individuals and companies offering to "help" the person out of his or her difficult financial situation.  In most cases, these people are out for one thing--making money from someone's problems.  These scams will come in many shapes and varieties...ranging from direct mail offering to "negotiate" on behalf of the home owner for a nominal fee to people knocking on the door offering to help out by reinstating the loan, taking title and leasing the home back to the individual.  People facing foreclosure are vulnerable to con-artists and scams.  However, using a little common sense any home owner can avoid being taken advantage of and find a viable and ethical solution for his or her dilemma.

Solutions that sound too simple or too good to be true usually are. If you're selling your home without professional guidance, beware of buyers who try to rush you through the process. Unfortunately, there are people who may try to take advantage of your financial difficulty. Be especially alert to the following:

The following lists several ploys implemented by these individuals:

Short Term Loans.  People may approach financially troubled home owners with the possibility of lending him or her a short term loan, and in some cases offer a loan with no payments for a certain period of time. These loans have high interest rates, require a balloon payments (where the home owner must pay off the loan by a certain date), or other features that may sound attractive. In reality, these loans are additional liens against a home and if the home owner fails to make a monthly payment or the balloon payment, the home owner could face foreclosure again.

Equity Splitting.  Real estate agents (many claiming to be "pre-foreclosure" specialists) offer reinstate a person's loan and sell the house with the idea of salvaging any accrued equity and appreciation in the home. The catch is that the home owner must split the earnings with the agent instead of paying a commission. The reality is that the home owner could have hired a competent agent and accomplished the same end result with less money out of pocket.

Equity skimming. In this type of scam, a "buyer" approaches you, offering to get you out of financial trouble by promising to pay off your mortgage or give you a sum of money when the property is sold. The "buyer" may suggest that you move out quickly and deed the property to him or her. The "buyer" then collects rent for a time, does not make any mortgage payments, and allows the lender to foreclose. Remember, signing over your deed to someone else does not necessarily relieve you of your obligation on your loan.

Phony counseling agencies. Some groups calling themselves "counseling agencies" may approach you and offer to perform certain services for a fee. These could well be services you could do for yourself for free, such as negotiating a new payment plan with your lender, or pursuing a pre-foreclosure sale. If you have any doubt about paying for such services, call a HUD-approved housing counseling agency at (800) 569-4287 or TDD (800) 877-8339. Do this before you pay anyone or sign anything.

Financial Servicesî Companies.  There has been a proliferation of individuals, often posing as a financial services company, that offer to assist home owners facing foreclosure with everything from tax advising, debt management, real estate sales and pre-foreclosure sales. The reality of these individuals is that they do not run legitimate corporations and are not legally licensed for debt or credit counseling. Be wary of anyone who wears a thousand hats for any occasion or pay money for their services upfront!

Visitors.  Expect many people, including investors and real estate agents, to visit your home. They will paper your house with flyers, knock on your door at all hours, and stalk you and your family until they have an opportunity to speak with you. The worse perpetrators are individuals posing as government employees dispatched to your home to assist you. The lender, the County, and the Federal government will not send out personal representatives to assist you unless you have initiated the call to the right agency.

Bankruptcy.  No matter what an attorney may tell you, bankruptcy does not stop foreclosure.  It is true that bankruptcy does suspend the foreclosure process.  For more information on foreclosure and bankruptcy, contact Keith Brown directly at 626-230-1000 or speak to one of our representatives 24 hours a day at 888-871-9518.