Your Legal Guide Through Business, Fraud, Real Estate, And Other Legal Disputes

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Avoiding foreclosure scams

On Behalf of | Feb 13, 2024 | Real estate disputes

If you are a California homeowner with financial difficulties, losing your home to foreclosure may be a significant concern. Unfortunately, unscrupulous individuals may attempt to exploit your situation by offering ineffective “foreclosure prevention services.”

Questionable services

Some foreclosure scammers charge significant amounts of money to perform services you could do for yourself, such as completing loan modification forms or composing hardship letters. If you are confused about what to do, contact your mortgage lender for information. You can also contact a U.S. Department of Housing and Urban Development certified housing counselor who can assist you with paperwork.

Title changes

The most complex foreclosure scams involve changes to your home’s title. They can take several forms, but at some point, you surrender ownership, or a portion of ownership, in your home to the scammers. Once this happens, you may be unable to get your home back.

Examples of title change fraud include a promise of refinancing your home, handing you a lot of legal paperwork to sign, and then learning that you deeded your home to the scammer.

Another scenario is a company that offers to get you out of debt by temporarily taking ownership of your home in exchange for clearing your mortgage and other debts. The company will promise you that you can continue to rent the home while you pay them back. Instead, you’ll likely be evicted or unable to pay back what you owe, resulting in the permanent loss of your home.

Identity theft

A fraudulent foreclosure service or provider will ask for personal and financial information as part of their application process. The scammer can then use this information to steal your identity or sell the information to identity thieves.

Identifying red flags can protect your home and finances while seeking legitimate foreclosure prevention assistance. Never pay money upfront for services; continue repaying your mortgage directly to your lender, and work with your lender and community agencies to resolve your issues.