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Simply put, foreclosure occurs when a homeowner is no longer able to make the required mortgage payments. As specified in the mortgage contract, this allows the lender to seize the property, evict the homeowner, and sell the home.

Finding a Way to Keep Your Home

Homeowners facing foreclosure and at risk of losing their homes, may be qualified for one-on-one foreclosure prevention counseling with an NFCC certified credit counselor from a HUD-approved member agency. As part of the session, your counselor will help you explore different ways of resolving your mortgage situation. If you fear that you are going to have trouble making your mortgage payments, contact us immediately and let us help you get through your financial difficulties.

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Foreclosure “Rescue” Scams

Rising foreclosure rates have led to a growing number of scam artists offering to “rescue” homeowners in financial distress. They use a wide variety of scams and target people of all ages in virtually every community across the country. It can happen to anyone. These foreclosure rescue scams usually revolve around heavily promoted deals supposedly designed to save the homes of people facing foreclosure-those who have fallen behind on their mortgage payments. They proclaim to “save your home” or “pay your mortgage,” but in reality generate a quick profit for the scam artist or strip away the value of your home with no benefit to you. Scam artists can evict you from your own home and then sell it on the open market.

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How Does a Foreclosure “Rescue” Scam Work?

The “rescuer” identifies distressed homeowners through public foreclosure notices in newspapers, via the Internet, or at government offices.
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The “rescuer” then contacts the homeowner by phone, personal visit, card or flyer left at the door, or advertising. The initial contact typically centers on a message that tells homeowners that they can stay in their house easily, get a “fresh start,” keep their credit rating or receive instant cash.
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The scam artist generally looks to make a quick profit through fees or direct mortgage payments that are never passed on to the lender. Sometimes the scammer assumes ownership of the property by deceiving the homeowner.
During the first meeting, the homeowner is often told to stop all contact with lenders, credit counselors, or lawyers and let the “rescuer” handle all the details. This cuts off the homeowner’s access to legitimate financial solutions.
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Once it is too late to save the home, the “rescuer” either takes the property or the owner loses the home to foreclosure after it has been drained of equity through fees and charges.

Legitimate or Fraudulent?

Legitimate companies will sit down with a homeowner and collect documentation. Their representatives will explain the offer and the process in as much detail as needed to make an informed decision. All promises and agreements will be in writing. Their representatives will not object to your desire to consult a lawyer, credit or housing counselor, family member, friend or other expert resource.

Most legitimate companies will not solicit your business through high-pressure direct marketing, nor will they make promises up front to save your home, offer immediate cash or save your credit rating.

Before you sign any contracts, you should contact your lender, a credit or housing counselor, or a lawyer. When in doubt you can also check out the company’s veracity at

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Red Flags to Keep in Mind

  • Calls itself a “mortgage consultant” or “foreclosure service.”
  • Contacts people whose homes are listed for foreclosure, including anyone who uses flyers or solicits for business door-to-door, by phone, or email.
  • Encourages you to lease your home so you can buy it back over time.
  • Collects a fee before providing any services to you.
  • Instructs you to cease all contact with your lender, credit or housing counselors, lawyer or other legitimate experts.
  • Tells you to make your mortgage payments directly to him or his company (not the lender).
  • Requires that you transfer your property deed or title to him or his company.
  • Makes a promise that seems too good to be true, for example, instant cash with “no strings attached.”
  • Tells you that as part of the deal you will need to move out of your house for some period of time for remodeling or other reasons.
  • Offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale.

Things a Homeowner Should Never Do

  • Don’t be pressured to sign a contract. Take your time to review all documents thoroughly, preferably with a lawyer who is representing your interests only.
  • Don’t send or give your mortgage payments to someone other than your lender, even if he promises to make the payments for you.
  • Don’t sign away ownership of your house to anyone without advice from a credit or housing counselor or lawyer.
  • Don’t rely on verbal agreements they mean nothing. Get all promises in writing and keep copies of all documents, especially those you sign.
  • Don’t sign anything containing blank lines or spaces. Scammers can add information later without your knowledge or approval.
  • If you do not speak English, use your own translator. Don’t depend on someone who is provided by the “rescuer.”
  • Don’t fall for promises that are often used to lure homeowners into scams. For example:
    • Claims to save your credit rating
    • Promises of instant cash
    • Guarantees that a buyer will be found within a certain number of days
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Common Schemes to Look Out For

Bait and Switch

The homeowner is purposely deceived and therefore does not understand that he is selling the house in exchange for a “rescue.” Many believe they are signing documents for a new loan or other financial arrangement that would allow them to retain ownership by paying off mortgage payments that are past due.

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The False Intermediary

The “rescuer” charges an upfront fee or very high fees to “save” the house by negotiating with the lender or promising to quickly find a buyer for the house. The scammer usually seals the homeowner off from legitimate help or legal relief by telling the owner that he should not talk to the lender, seek out credit counseling or legal advice. Once the fees are paid, he vanishes with a quick and easy profit. The homeowner is usually left without enough help to save the home and with little or no time left to prevent foreclosure. Sometimes, the scammer will insist that a homeowner make all mortgage payments directly to him while he negotiates with the lender. He may collect a few months’ worth of payments before disappearing.

Bogus Rent-to-Buy Scheme

The homeowner surrenders ownership of the house thinking he will be able to pay rent and then buy it back over a few years. The terms of the buy-back deal are usually stacked against the homeowner, with the resale price well above market value. Sometimes, the scam artist hikes rental fees very significantly over time. Once the former homeowner misses rent payments, the family is evicted, leaving the “rescuer” free to sell the house. Even if the former homeowner is able to pay the rent, the terms of the buy-back are so burdensome that he ends up losing possession of the house and the scam artists keep all or most of the equity.