How to Avoid Foreclosure Rescue Scams?

According to CNN money more than one million borrowers have had their homes put on foreclosure so far this year. With the rise in the number of foreclosures, the number of reported "foreclosure rescue" scams has also risen to alarming proportions. Foreclosure scams are being reported from every part of the country. The people who operate the foreclosure scams take advantage of the homeowners' ignorance and the fear of losing their homes. Don't be the next victim and lose your house to the con artists.

If you are contacted by third parties who offer their services to help you with foreclosure you must take the following steps:

1. Contact your lender and find out how they can help you to avoid foreclosure. Lenders don't want to foreclose because it can be expensive for them. The lender may be able to workout a repayment plan that you can easily afford. The mortgage period will get extended but it will lighten your financial burden considerably. In other words your lender will workout a new forebearance agreement for you. This will supersede the earlier agreement. Other options may also be available.

2. Seek advice from a reputed attorney whom you already know or who comes with good references. You should avoid consulting an attorney either appointed or recommended by the lender. In no case should you consult an attorney representing a third party who is offering foreclosure assistance.

3. Be wary of offers to lease back your home, in order to buy it back over time. On the face of it such offers sound good but it will be impossible for you to buy back the home later. These people usually try to buy the home from you at a very low price and you lose your equity as well. These offers are usually weighted against you.

4. Never make mortgage payments to anyone other than the lender. Some 'consultants' may ask you to hand over the mortgage payments to them so that they can deal directly with the lender.

5. Never surrender the title to your home believing you'll become a renter and buy the house back over a few years.