You hear of scams every day and the housing market is just one of the areas scammers like to prey. In the phantom help foreclosure scam, con artists promise help, but they’re really just helping themselves to your money. Beware!
One of the ways phantom help targets an area is through direct mail. Homeowners in distressed situations are especially vulnerable as they often would like to keep their home and are looking for any and all available options. Often good judgment goes out the door. So when someone comes along promising help, they are more likely to take the bait.
What do phantom scammers do to you? They start by saying they can negotiate a deal with your lender, only they have no intention of doing so.
Here are some warning signs you can look for:
- Demanding upfront fees.
- Telling you not to contact your lender, lawyer or a credit counselor.
- Asking you to sign over the deed to your home. They take that and then sell your home.
- Getting enough personal information so they can commit identity theft.
- Charging you for access to free government assistance.
- Using the government’s name and official sounding words like TARP or an official looking website to con you into making payments to them.
- Telling you to make mortgage payments to them instead of your mortgage company.
It’s important to know that a homeowner never needs to pay for information on legitimate government programs. A U.S. Department of Housing and Urban Development can help you for free. Beware of businesses who guarantee to stop your foreclosure, claim to have special relationships with banks or offer money-back guarantees. All too often, customers pay the fees, nothing is done and then the next thing they know, the company is out of business. So much for that money-back guarantee. Finally, beware of unsolicited offers to refinance as they may be scam artists. And don’t fall for someone who says they have an affiliation with the government when it comes to that supposed refinance.
For federal refinancing and loan modification help, check into the Making Home Affordable Program. And for short sale help, check out the Home Affordable Foreclosure Alternative Program (HAFA). With HAFA, sellers get $3,000 at close and there is no promissory note, no deficiency and no money due at the closing table.
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