BCP Home | Consumer Education | Lawsuits
About BCP:  Deceptive Trade | Antitrust | Utilities  

How to Spot a Foreclosure Scam
 

Many foreclosure rescue offers contain the following:

• You are asked to sign a contract agreeing to turn over ownership of your home to the company.

• The contract states you will lease your home for a specific amount of time, with the option to buy back the home at a later date.

• The company rescuing you from foreclosure requires you to pay a substantial fee which may be equal to all your equity in the home.

• At the end of the contract the company promises to return home ownership back to you.

According to the National Consumer Law Center, the predominant foreclosure “rescue” scams appear to come in three varieties: the phantom help, the bailout, and the bait-and-switch.
 

Phantom Help: The “rescuer” charges outrageous fees for light-duty phone calls or paperwork that the homeowner could easily do, none of which results in saving the home. This predatory scam gives homeowners a false sense of hope and prevents them from seeking qualified help.

The Bailout: In this scam, the homeowner is deceived into signing over the title with the belief that he will be able to remain in the house as a renter and eventually buy it back over time. The terms of these scams are so onerous that the buy-back may be impossible, the homeowner loses possession and the “rescuer” walks off with most or all of the equity.

The Bait and Switch: In this scam, the homeowners think they are signing documents to bring the mortgage current, but instead actually surrender their ownership. They usually don’t even know they’ve been scammed until they’re evicted.
 

Problems associated with foreclosure scams
Options for homeowners facing foreclosure
Filing a complaint about a foreclosure scam