Stay Away from Scammers Capitalizing on Foreclosed Homes

If you are looking for paid foreclosure counselors or services because nonprofit or federal housing agency counselors have too many clients to attend to, ask around first to protect yourself from scammers capitalizing on foreclosed homes.

Marietta Rodriguez, head of Neighborworks America’s National Home Ownership Programs, said many counselors charge high fees for simple services and make guarantees for services that they cannot deliver. She said even licensed foreclosure services require upfront payments before they begin working with homeowners.

The first thing that you should consider when you are looking for services specializing in averting foreclosed homes is the total cost of the service and how the payment is scheduled. You should stay away from counselors demanding high upfront fees and guaranteeing loan modifications. Legitimate services often split payments so that you will give them the final payment when the desired service is completed.

Austin King, a spokesperson for the community association Acorn, said many for-profit counselors charge fees for information available for free on the Internet. King advises homeowners to contact HUD-certified counselors, who are paid by government agencies and nonprofits to help avert the soaring number of foreclosed homes.

Check if the counselor or service provider has been working in the area of foreclosed homes for years. Counselors who have known lots of foreclosure processes are more adept in evaluating various foreclosure cases and are more skillful in finding options under Obama’s program that fit your case.

Ask the counselor for proof of working relationships with your mortgage servicer. Is the foreclosure prevention firm familiar with the modification procedures of your mortgage lender?

Make sure also that the counseling firm assigns you a counselor that will stay with you until your mortgage loan is modified and safe from following the fate of foreclosed homes.

One of the strategies of money-making foreclosure prevention firms is to pass you from one counselor to another, especially if you have already paid the fees and they have found that your mortgage cannot be modified by the lender.

Finally, one of the marks of a good and experienced counselor is to be able to see when it is best for the borrower to just let the property follow its course to foreclosed homes. There are many borrowers who cannot really afford even low monthly payments.

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