Criminals target people with something valuable to steal, whether their identity or money.
Homeowners who are already struggling and at risk of foreclosure are more vulnerable to being victimized because heightened emotions can lead to poor decisions.
There is real help available to save your home. Anyone who tries to get you to act quickly or miss out on their great offer does not have your best interest in mind; they’re likely trying to take what is yours.
Top 4 current scams on homeowners
Pinellas County Consumer Protection offers hope to struggling homeowners. MakingHomeAffordable.gov is the place to start.
Many scams make the rounds over and over, maybe with a new hook related to some current event or negative economic outlook in the city or around the country.
Staying on top of what the criminals are up to lets you cut them off and protect yourself and your investment.
1. Bankruptcy Relief
The scam artists claim they can get you an unbelievably good re-fi on your property. They ask you to pay them an upfront fee saying they’ll deal directly with your lender for a great deal.
Instead of doing what they promise, they immediately file a bankruptcy claim in the homeowner’s name. A bankruptcy claim may stop a home foreclosure for a time, but it isn’t entirely off the table. You’ll be back in foreclosure unless you meet very strict conditions. It can also cost you any possibility of rebuilding your creditworthiness for at least ten years.
Talk directly with your lender. You don’t need a go-between. Find out if there are low-interest loans, grants, or refinancing options that let you keep your house and skip the scam.
2. Bait and Switch
The ol’ “bait and switch” is a scam that’s been around for centuries, and now criminals are using it to separate you from your money and home.
The scammer comes on the scene, usually in a rush to enter into a deal where you make whatever mortgage payments you can to them. Then, they’ll claim they’ll send the payment along to the bank and negotiate a better loan.
That’s not what happens, and you’ll be out the little money you may have been able to scrape together, and you’re in even deeper to your lender.
Another version of the bait and switch is when the scammer asks you to sign paperwork that supposedly will make your mortgage current. Of course, there’s no such thing. Instead, you’re surrendering the title of your house, and the promised rescue loan doesn’t exist.
3. Rent-to-Own
Again the criminal goes after the title to your home. The claim is once you sign off, you can stay in your home as a renter. Then improve your credit score by making on-time payments, and you’ll probably hear a promise you’ll be able to get great financing and buy your house back.
But there’s nothing in the deal guaranteeing the con artist will ever have to sell your home back to you. So while the scammer is spending your money rather than paying the mortgage, you are still at risk of being evicted and the house foreclosed.
Other variations on the rent-to-own scam involve the criminal getting your title and then jacking up the rent so high you can’t afford to stay. Or, the promise of finding a buyer to get you out from underwater, the catch? You sign over your deed and move out. You are allowing the scammer to rent your home and pocket the money until the bank forecloses. Then he moves on to his next victim.
4. Phantom Help Scam
This is also called a phony counseling scam. The criminal will come claiming to be with a company that works with lenders to save homeowners from foreclosure.
They request a fee for handling it all for you. The check will get cashed, but there are no efforts to improve your standing with your mortgage lender.
How to spot red flags that mean STOP
In a rush
Scammers are good at tricking you into believing you need to make a decision and a payment immediately or lose the opportunity.
In reality, legitimate companies and agencies will build in some time for you to consider all the options and make an informed decision.
Too good to be true
If you’re in financial trouble and someone appears out of the blue promising a quick, easy fix to all your money troubles, they’re simply lying. It’s complicated, but if you take a realistic view, you will likely find a solid, long-term solution.
Cash or gift cards only
A legitimate company should accept credit card payments. Your credit card company can reverse fraudulent charges during an investigation, then confirm you were a victim, and you get to keep your money.
Someone rushing to get you to go to the bank and withdraw a bunch of money or buy hundreds or thousands of dollars loaded on gift cards is up to no good.
The scammer will also likely claim either their company has a special relationship with your lender out outright claim they can immediately stop the foreclosure. Experts say steer clear.
What should you do?
If you fall victim to a foreclosure fraudster, immediately report it to your financial institution, including any paperwork or receipts you may have.
Make a report to law enforcement; you’re a victim of a crime. These crimes may be referred to the F.B.I. for further investigation and possible prosecution.
Helpful resources
Begin by contacting your mortgage lender to explore possibilities.
Turn to Neighborhood Home Solutions (NHS) for free, legitimate services to help homeowners stay in their homes or buy a new house.
Report a scam to Pinellas County Consumer Protection
You may find help through St Petersburg and Foreclosure Prevention
Several agencies offer free or reduced fee legal help for struggling homeowners:
Conclusion
It’s easier said than done but try to keep a cool head. Panicking makes you more vulnerable.
Talking to your lender and discussing realistic options with them will get better, legal results every time.