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Avoiding Foreclosure Scams

Foreclosure scams have become increasingly common, preying on homeowners who are struggling to keep up with mortgage payments. These scams can be devastating, causing financial and emotional distress for victims. In many cases, homeowners are unaware that they're being scammed until it's too late.

Warning Signs of a Foreclosure Scam​

Be Cautious of Companies That Make Unsolicited Contact​

Many foreclosure scams begin with unsolicited contact from companies claiming to offer assistance with your mortgage. These companies often use high-pressure tactics and may claim to have a "special deal" that must be acted on immediately.

  • Look out for companies that:
    • Call or email you unexpectedly, trying to sell you something
    • Promise quick fixes or guaranteed results
    • Demand payment upfront in exchange for their services
    • Fail to provide clear information about themselves and their services

Be Skeptical of Companies That Ask for Personal Information​

Scammers often try to gather as much personal and financial information from homeowners as possible. This can include your Social Security number, bank account numbers, or credit card details.

  • Avoid giving out:
    • Your Social Security number unless absolutely necessary (and only with companies that have a legitimate reason to request it)
    • Personal and financial information over the phone or in person
    • Payment information without verifying the company's legitimacy

Be Wary of Companies That Offer Unrealistic Solutions​

Some foreclosure scams promise homeowners that they can:

  • Stop foreclosure proceedings immediately
  • Reduce mortgage payments by a significant amount
  • Provide funding to pay off your mortgage

These promises are often too good to be true and may indicate a scam.

How to Protect Yourself from Foreclosure Scams​

Research Companies Thoroughly​

Before working with any company, research them thoroughly online. Look for reviews, ratings, and complaints filed against the company. Check if they're registered with the Better Business Bureau or other reputable organizations.

  • Use online directories like the National Association of State Boards of Accountancy (NASBA) to verify a company's registration
  • Search for complaints on websites like the Federal Trade Commission (FTC) Consumer Complaint Assistant

Verify Licenses and Certifications​

Make sure any company you work with is properly licensed and certified. This can include licenses from your state's Department of Financial Institutions or certifications from industry organizations.

  • Check if a company has a valid license to operate in your state
  • Verify if they hold any relevant certifications, such as foreclosure prevention specialists

Seek Professional Help​

If you're struggling with mortgage payments, consider seeking help from a reputable non-profit credit counseling agency. These agencies can provide you with free or low-cost advice on managing debt and avoiding foreclosure.

  • Look for organizations that are accredited by the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA)
  • Be wary of companies that charge high fees or demand payment upfront