Beware! There are people out there who will try to profit from your misfortune. These people may contact you by mail or telephone, or even knock on your door offering you quick and easy solutions to your problems. If the deal sounds too good to be true, it probably is! Here are some of the foreclosure rescue scams you may be offered:
- Deals that let you stay in your home – Some foreclosure rescuers will offer to bring your mortgage up to date and let you stay in your home until you can pay them back. Victims of these scams often do not realize that they have actually sold their homes, turning themselves into tenants with very high rental payments!
They end up facing eviction and losing all of their equity. If someone offers to pay off your mortgage arrears and let you stay in the home, read EVERYTHING you sign very carefully. The rescuer may be stealing from you by walking away with most or all of your home equity!
Unethical consulting services – Some foreclosure rescuers try to pass themselves off as legitimate foreclosure counselors. They may charge you for services you can easily do for yourself, or take steps that actually hurt you. Do your homework on any foreclosure counseling service. Ask if the company is accredited and by whom, and find out how long it has been in business. Research the company to find out if it is a fake.
Bait and switch/fraud – Some foreclosure rescuers will simply lie about what they will do for you. Protect yourself! Contact HUD for a list of free home ownership counseling services and regulatory agencies.
Sandy’s advice is good. You would be wise to be very cautious, especially if an organization asks for upfront money, or guarantees to both save your home and reduce your principal.
With that said, there are legitimate lease-buyback programs. You should be very careful though because the repurchase period can setup a situation where you will lose your home and downpayment if you cannot qualify for the financing required to exercise the repurchase option.
At the risk of tooting our own horn, HomeLiberty has a program that is not a rent-to-own/lease buyback. It is a straight repurchase with seller side financing provided, so there is no need to qualify for 3rd party financing. We believe it is a much better arrangement to simply repurchase your home at or near the current market price with a new 30 year fixed loan.