Foreclosure rescue firms have many different ways to find potential clients. Some of them simply check local foreclosure listings in local legal announcement newspapers or directly access public records at local government offices. These rescue firms will often send very well crafted personal looking letters to desperate homeowners. Other foreclosure firms cast a wide net and use Internet advertising, TV spots, newspaper ads and even fliers. No matter the method used the advertising typically features a simple message like “Stop Foreclosure” or “Save Your Home” and will be rather spotty on the details. Legitimate financial counselors don’t advertise this way in most cases.

Some will tell you that they can guarantee you that they can stop your foreclosure. Well, they can’t. This is entirely up to the lender, especially once the foreclosure legal procedure has begun. No legit housing counselor will make such a guarantee to you. Some of these foreclosure rescue firms tout that they have special business relationships with banks and mortgage lenders that will allow them to ‘fast track’ mortgage loan modification. Often, this isn’t true and, anyway, lenders will refuse to negotiate with third parties unless they’re a practicing attorney or a HUD certified housing counselor. Remember negotiating a loan modification or a short sale is a long and complex process and anyone who’s promising quick results isn’t being truthful with you.

One thing that these foreclosure rescue scammers will tell you to do is to not contact your lawyer and not to speak with the lender. This is a classic con job tactic that’s meant to keep you from communicating with people who might expose the scam to you. You should be suspicious of firms who request a fee before providing you with services. Even worse are those who ask for wire transfer payments or tell you to send your house payments to them rather than to the lender. Those who operate in person will try to pressure you into signing paperwork without explaining it. As we’ll see in a moment, this is particularly dangerous.

Perhaps the most common con is that of a fake housing counselor. These tricksters will tell you that they can save your house from foreclosure if you’ll only pay them an upfront fee roughly the same as your mortgage payment. They’ll pass themselves off as having great negotiation skills and special connections with your lender. They’ll also tell you not to contact anyone else about this special deal in order to keep it secret. As you can guess, the conman runs off with your money.

Another foreclosure rescue con that they’ll pull is to offer to get you into a new home loan that will pay off your existing mortgage loan or simply bring it current. In this case, the unwitting homeowner signs a document that turns over the house title to the scammer. They do this by pressuring you into signing quickly or by presenting you with overwhelming paperwork. The really sad part is that many victims don’t realize they’ve been conned until the sheriff shows up with an eviction notice.

Another trick that foreclosure rescue scammers pull that’s more legal but still very sneaky is a rental scheme. In this scamming technique they offer to buy your home and then allow you to stay in it as a renter and buy it back over time. They’ll say that once you’re released from the burden of the original mortgage it will be easy for you to get a new loan to repurchase the home. Unfortunately, it doesn’t work this way. Sometimes the conman just cashes out the equity and defaults on the loan, resulting in the mortgage company evicting the renter, the previous homeowner. Another way this works is for the scammer to keep raising the rent until the original homeowner can’t pay and is evicted. Sadly, this process, although highly unethical, is legal in most states.

A similar ’sign over the deed’ trick is a buy out-move out con. In this scam the homeowner is told that a ‘white knight’ financier will buy the house from them and hold it until it sells for a profit. They’ll tell the owner to transfer the title to the house and that they will need to move out so that they can ‘flip’ the house easier. When the house sells at a profit, they promise to share the profits with the original homeowner. But, what usually happens is that the scammer simply rents out the home and pockets the money, letting the house fall into to foreclosure under the owner’s name. This creates an ugly surprise for the homeowner, because they’re still responsible for the mortgage, and for the unsuspecting renter as well.

The last foreclosure rescue scam we’ll look at is the unauthorized bankruptcy. In this paperwork shuffle con, the homeowner signs a document allowing the scammer to file bankruptcy on them. This is usually done in the guise of an offer to renegotiate the home loan with the lender or to get refinancing. This is always accompanied by an upfront fee. While bankruptcy will stop the foreclosure, at least temporarily, it does have considerable legal and financial repercussions that can be quite difficult to deal with.

Be wary of these foreclosure rescue scams and protect your financial future.

Related posts:

1. How to Avoid Home Loan Foreclosure If you are one of the thousands of people who’ve...
2. Loan Modification Attorneys Perhaps you have wondered if hiring an attorney can help...
3. Home Loan Foreclosure Advice Perhaps you’re a homeowner who is facing foreclosure. Maybe your...

Begin by going over all of your home loan documents so that you are prepared for any upcoming resets or other changes to the conditions of your loan. When will your payments increase? By how much? Can you refinance? What kind of penalty would you face for refinancing, if there is any?

You may need to make significant changes in your spending and lifestyle in order to keep your home and maintain your credit in good standing. You may need to consider taking on a second job to help make your payments. Avoid making any major purchases at this time when you are facing financial hardship and the economy is uncertain. Think about selling other assets if you can, such as cars or boats, so that you can use this cash to assist you in meeting your payments.

You should always take the initiative with your home loan lender. It is important that you contact them before the problem becomes overwhelming to you. Should you receive calls or letters from your lender it is imperative that you  respond to them as soon as possible. Do not wait to get too far behind. Lenders are less likely to move quickly into foreclosure if you have been proactive and show that you’re working to make your payments. You will want to speak to the right people. This can be tricky because of the way home loans are resold but be persistent. Ask for the loss mitigation or collections department. It is key for you to be completely honest with them about your situation. Also, don’t make promises to them that you can’t keep even if they pressure you in to accepting unfavorable terms.

You should beware of foreclosure rescue scams and other related rackets. There are a number of scam artists who target people in neighborhoods where foreclosure rates have been high. Their typical approach with troubled homeowners is to promise to help them keep their houses. The trick is that these mortgage loan rescues often come with payments which are out of reach of the average homeowner. This results in the homeowner being defrauded of their home and often still owing the original mortgage amount. Should any company approach you with such an offer make sure that you check them out through the Better Business Bureau as well as your state real estate commission and Attorney General. Do not sign anything without reading it all and get all promises in writing. Ask your attorney or other real estate financial professional to review any paperwork before you sign it. And remember that if it sounds too good to be true it probably is.

Another approach is to contact a nonprofit group that offers free housing advice specific to your area. This is a good way to get more information and financial counseling. They may be able to help you with your options. If you took out a loan between Jan. 1 2005 and July 30, 2007, are current on your loan payments and your mortgage has not yet reset to a higher rate, you may be eligible for a five year rate freeze.

If all else fails, you can always try to negotiate a short sale. If you have missed more than two payments but your home has not yet gone into foreclosure this is the right time for you to find out if you can sell your home for a price that falls short of what you owe the lender on your original home loan. Should your mortgage holder agree to accept the sales price and forgive the rest of your debt, they forgo the pricey foreclosure process and save money. As for you,  you will walk away with only minimal damage to your credit score in most cases.

I hope this article has provided you with some important information on how to avoid home loan foreclosure.

Related posts:

1. How To Avoid Foreclosure Rescue Scams One question that is on many people’s minds today is...
2. Home Loan Foreclosure Advice Perhaps you’re a homeowner who is facing foreclosure. Maybe your...
3. Mortgage Loan Modification Problems Have you had problems trying to get a mortgage loan...

First of all, it’s important to understand that there is little a lawyer can do to help you save your home. None of the laws governing home mortgages, even the ones passed recently like the Making Home Affordable program, force lenders to offer lower interest rates or make other concessions to troubled homeowners. Not even a bankruptcy judge can modify or ‘cram down’ the interest rate on a mortgage loan without the agreement of the mortgage lender. Only a very few give their agreement though. While the laws offer incentives, fewer than expected mortgage lenders are offering modification programs or they’re making the process difficult. Plus, the current programs were designed to assist people with sub-prime mortgages. Due to high unemployment or underemployment, more and more conventional mortgages are falling into default and there are no programs for these loans and lenders are less willing to negotiate these loans.

What you will primarily want from a loan modification lawyer is their ability to negotiate and navigate the often tricky world of mortgage loans and real estate law. Often the troubled homeowner is overwhelmed by the amount of paperwork involved as well as the emotionally draining threat of losing their home. A good attorney can assist the homeowner in the process. This will be based on the particular situation of the homeowner. In some cases, bankruptcy, either Chapter 7 or Chapter 13, will be the best option. Others may require some negotiation and speaking with the right people. Often an attorney calling can get more attention than the homeowner calling.

But, how do you find a good and reliable loan modification attorney that can really assist you and not rip you off?

Unfortunately, the current economic situation has created a number of fraudsters billing themselves as “foreclosure rescue specialists.” These organizations, which may or may not be tied to a law firm, seek out desperate homeowners. They will often tell the homeowner that they can save their home but they want a large upfront fee to do so. Others use other legal trickery to scam troubled homeowners. You need to be very wary of any loan modification attorney or foreclosure rescue organization that makes vague promises of saving your home while demanding a substantial upfront fee.

However, there are a few good loan modification lawyers that have been successful in challenging foreclosures based on the lack of a good paper trail due to the way mortgages were repackaged as financial instruments. Others have challenged the mortgage based on evidence of predatory lending. These legal maneuvers don’t work in every case and take specialized legal skill so it is important to find a lawyer who is well acquainted with these methods.

In order to locate a good attorney you will need to find one that specializes in bad mortgages and consumer law. One of the best ways to find such an attorney is to consult your local HUD-approved housing counseling agency. They can give you a referral. Always ask for multiple references. Check out the references and make an appointment to discuss your case. This meeting should be free of charge and should clearly describe the legal process they will use and what the fees for their services will be. If they ask for a big upfront fee, be prepared to walk away. Also be wary of high pressure sales tactics as well.

Sadly, there are many more troubled mortgage loan cases than the number of available loan modification attorneys can handle. Plus, most families that are having trouble paying their mortgage are very short on money and will find it difficult to pay for a lawyer. Sometimes though, local legal aid organizations can help put troubled homeowners in touch with an attorney that will take their case for low or no cost.

Related posts:

1. Home Loan Foreclosure Advice Perhaps you’re a homeowner who is facing foreclosure. Maybe your...
2. Mortgage Loan Modification Problems Have you had problems trying to get a mortgage loan...
3. How To Avoid Foreclosure Rescue Scams One question that is on many people’s minds today is...