A rise in mortgage delinquencies is often
accompanied by an increase in foreclosure rescue scams. The prospect of losing
your home and damaging your credit is enough to scare anyone, but when you add
the additional threat of being duped out of your hard-earned money by an
unscrupulous scam artist, it’s easy to see why some people facing foreclosure
want to throw up their hands and give up. The fact that there are opportunists
in the world that prey on the vulnerable is a sad but constant fact of life.
Nevertheless, you can protect yourself and your family from fraud and avoid
making risky decisions by educating yourself, asking lots of questions and most
importantly by keeping your money in your pocket.
Unfortunately, a crook
is unlikely to tap you on the shoulder and announce his intention to steal your
money. Thieves come from all backgrounds and live in all places, so it is a
mistake to think that you will be able to identify a con artist by the way
he/she looks or by the way he/she acts. In fact, a successful con man is likely
to be very good at making you feel comfortable and safe. So how can you spot a
foreclosure scam? What are the warning signs? Generally, it is the
‘too-good-to-be-true’ promises con men often make as well as the questionable
things they ask their victims to do that should raise big red flags.
Successful scams
normally require the victim to willingly give money to the perpetrator (this is
the critical mistake). Bernie Madoff would not have been able to swindle
billions of dollars unless his victims had entrusted him with their money. Most
email scams promise victims large sums of money as a result of winning a bogus
lottery for example. In most cases, these victims will eventually be asked to
pay advance fees to allow the phony deal to proceed (gotcha!). So how do you
avoid making this error? The answer is simple--by keeping your money in your
pocket! You can only lose money that you’ve actually given away—so don’t give
away any money! A request for you to pay fees in advance before any service is
provided should always make you stop and think twice, even if the person
requesting the money is an attorney. Remember, every dollar you give away is a dollar
you may never see again.
If it sounds too good to be true, it probably is. Since thieves are
singularly focused on taking your money, they will promise you anything in
order to get it. Keep in mind that you can only put a guarantee on things you
have 100 percent control over. If a homeowner can’t pay his mortgage, only his
lender can guarantee a particular outcome. Therefore, if you are guaranteed a
specific result (i.e. a promise to stop your foreclosure, lower your mortgage
payment or loan interest rate), you should ask yourself, does this person
actually have the authority to make this decision? If the person giving you the
broad guarantee does not have decision-making authority, chances are either he
is incompetent or he is lying. Either way—you should run for the hills! Don’t allow
yourself to be used as a guinea pig. As a rule, you should always ask for
references and demand that anyone offering to provide you a service demonstrate
proof of his experience as well as the results he has already achieved with
other customers.
So what should you do if you are having trouble paying your mortgage?
First of all, be honest with yourself about what you are hoping to accomplish.
If your financial problem is temporary and you do not want to sell your
property, contact your mortgage lender yourself— you don’t need to pay anyone
else to do this for you. Dealing with your bank will probably be time-consuming
and frustrating but at least it won’t cost you any money at a time when money
is probably scarce. Believe it or not, your bank may be willing to work out a
payment plan with you. Lenders sometimes offer options to homeowners
experiencing financial difficulties as an alternative to the expensive and
lengthy process of foreclosing on a home. Above all else, remember to keep your
money in your pocket.
Gerald Lucas, 'The
Short Sale Authority' http://performanceshortsale.com/ has successfully
negotiated hundreds of short sales over the past decade he has spent in the
real estate business. He shares his
extensive experience as a real estate investor, coach, college professor and
lecturer. Mr. Lucas is Managing Director of Performance Property, LLC, a short
sale negotiation company based in Jersey City, NJ
http://www.performancepropertyllc.com/
Mr. Lucas holds an undergraduate business degree from Howard University
as well as an MBA from MIT's Sloan School of Management.
