Types of Foreclosure Rescue Scams

Equity skimming: A "buyer" approaches you, offering to get you out of financial trouble by promising to pay off your mortgage or give you a sum of money when the property is sold. The "buyer" may suggest that you move out quickly and deed the property to him or her. The "buyer" then collects rent for a time, does not make any mortgage payments, and allows the lender to foreclose. Remember, signing over your deed to someone else does not necessarily relieve you of your obligation on your loan.

Phantom help: The "rescuer" charges outrageous fees for simple phone calls or paperwork that you could easily do, none of which results in saving the home. This predatory scam gives you a false sense of hope and prevents you from seeking qualified help.

The bailout: In this scam, you are deceived into signing over title with the belief that you 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 burdensome that the buy-back becomes impossible, you lose possession, and the "rescuer" walks off with most or all of the equity.

The bait-and-switch: In this scam, you think you are signing documents to bring the mortgage current, but instead you are actually surrender your ownership. You usually won’t realize that you’ve been scammed until you’re evicted.

Phony counseling agencies: Some groups that claim to be "counseling agencies" may approach you and offer to perform certain services for a fee. These could be services you could do for yourself for free, such as negotiating a new payment plan with your loan servicer, or pursuing a pre-foreclosure sale.