With the spike in foreclosures across the nation comes a spike in foreclosure scams. With that in mind, the Federal Trade Commission has issued an outline for identifying and avoiding cons. The three most commonly reported cons are:
The foreclosure prevention specialist: a phony counselor who does some paperwork on behalf of the homeowner and then charges outrageous fees. This counselor provides a false sense of hope while doing nothing to save the home. Make sure people hired on your behalf are qualified.
The lease/buy back: The scammer promises the homeowner he can stay in the house as a renter and buy the home at a later date in exchange for signing over the deed. The terms of the arrangement are made so demanding by the scammer that the homeowner cannot make payments and is evicted.
The bait-and-switch: Papers are presented to the homeowner to "bring the mortgage current" when actually they are signing over the deed to their home to the scammer.