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Early Warning Signs of a Predatory Loan
Avoid any Lender who:
*Promises one set of terms when you apply but give another set of terms to sign, without adequate explanation.

*Tells you to sign incomplete or blank forms - the lender says it will fill them in later.

* Falsifies information on the loan application. For example, the lender tells you to say that your income is greater than it is

* Pressures you into applying for a loan or for more money than you need

*Pressures you into accepting monthly payments you can't afford

* Misrepresents the kind of credit you're getting. For example calling a one-time loan a line of credit

*Says you can't have copies of documents that you have signed

* Demonstrating acts of Discrimination by charging a person more than a similar consumer who is not a member of that group

If you think you have been a victim of a predatory lender - Let others know. You can help stop someone else from being a victim of predatory lenders. File a complaint click here or visit www.azag.gov

Common Red Flags

1. Up-front charges
Legitimate counseling is offered by social service and government agencies and is usually free.
2. A promise to stop your foreclosure ‘no matter what’
Scam artists love simple, straightforward messages like “Stop foreclosure now!”, “Keep your home!”, “Save your home, guaranteed!” and “Free consultation.” Don’t believe them.
3. ‘Don’t talk to your lender …’
Or your lawyer or your credit counselor! Your lender is the first person you should contact if you’re having trouble meeting your mortgage. Always open the mail and answer the calls from your lender.
4. ‘I’ll fill out the paperwork for you’
Don’t sign the paperwork if you haven’t had time to look over or don’t understand it. Never sign anything under duress or anything with blank spaces. And never sign away ownership of your property without the advice of a good attorney.
5. Unexpected solicitations by mail, e-mail, phone or in person
The worst scammers will even play on an alleged connection with you, like attending the same church or having also come out of the military.

Scams

The 5 Most Common Scams

1. The Obama rescue plan scam
Some rescue companies are charging thousands to modify customer loans under the new Obama housing relief plan. But you can find out all you need to know yourself and see if you’re eligible at MakingHomeAffordable.gov or by calling 888-995-HOPE.

2. Bait and switch
A scam artist masquerades as a legitimate housing counselor and presents you with what appears to be an application for refinancing. But it’s actually a transfer of title and you lose your home.

3. Rent-to-buy scheme
Someone offers to buy your distressed home cheaply and rent it back to you. They promise that once you get your finances in order, you can buy it back. Sometimes it’s a win-win proposition for everyone, but it’s most often ripe for abuse. The con man usually strips your home’s equity and creates lease terms you can’t meet. Then they quickly evict you.

4. The middleman scam
An alleged rescuer charges you an up-front fee, sometimes thousands of dollars, to negotiate a deal with your lender. They promise to handle all the details for you and tell you not to contact your lender, lawyer or credit counselor — they’ll handle everything. You make your mortgage payments to the middleman while he negotiates with your lender, but he soon disappears along with your money.

5. The bankruptcy scam
A con artist promises to negotiate with your lender or get refinancing on your behalf, once you pay an up-front fee. They never contact your lender or refinance your loan, but they pocket your money and file for your bankruptcy. The bankruptcy temporarily stops the foreclosure, leaving you happily in the dark until the expensive bankruptcy goes forward, ruining your credit for the next 10 years.

NeighborWorks put together a video on foreclosure rescue scams

Watch this
Click Here to Watch the Video


 

Scammers are targeting people having trouble paying their mortgages.

These so-called foreclosure rescue companies promise to stop
foreclosure. But they're out to make a quick buck, and can turn a
homeowner's distress into disaster.

The Federal Trade Commission(FTC), the nation's consumer protection agency, produced the video "Real People, Real Stories to encourage homeowners to get the help they need. 

English | Español

Red Flags
If you are looking for foreclosure prevention help, beware of any business that:

  • guarantees to stop the foreclosure process – no matter what your circumstances
  • offers to make your loan more affordable and help you avoid foreclosure
  • instructs you not to contact your lender, lawyer, or credit or housing counselor
  • collects a fee before providing you with any services
  • accepts payment only by cashier’s check or wire transfer
  • encourages you to lease your home so you can buy it back over time
  • tells you to make your mortgage payments directly to it, rather than your lender
  • tells you to transfer your property deed or title to it
  • offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale
  • offers to fill out paperwork for you
  • pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand


Download the NEW Arizona Foreclosure Prevention Workbook
English


Consumer Tips from the OCC about Mortgage Scams
Scams that promise to “rescue” you from foreclosure are popping up at an alarming rate nationwide, and you need to protect yourself and your home Click here.
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