Published on: Wednesday, March 31, 2010

Like a shark swooping in for the kill, a scam artist moves quickly to take advantage of homeowners facing foreclosure. 

Con artists run scams to “save” a defaulting home, but in the end do nothing of assistance and, in fact, cause the consumer further harm.

 Homeowners should be wary if an individual or company:

• Calls itself a “mortgage consultant,” “foreclosure service,” or something similar.

• Contacts or advertises to people whose homes are listed for foreclosure, including sending flyers or soliciting door-to-door.

• Collects a fee before providing services to you.

• Tells you to make your home mortgage payments directly to the individual or company (not the mortgage lender).

• Asks you to transfer your property deed or title to the company.

Watch out for mortgage reconveyances.  This is an illegal practice where individuals or companies posing as “foreclosure consultants” claim they will either purchase the home themselves or find investors to purchase the home and provide you the right to purchase it back.  Consumers are told they can rent the properties back until they are once again able to manage the mortgage payments.  Once a consumer’s rating is back on track, the consumer supposedly has the right to buy it back.  Unfortunately, either the rent is higher than the original mortgage, and the consumer is evicted from his or her own home, or the money paid as “rent” is never sent to the mortgage company, so the home is still foreclosed upon and the money paid as rent is lost along with the home and any equity the homeowner had in the property.     

Jeanette Lee

Consumer Education Director

Office of the Attorney General