If you are facing mortgage default or foreclosure, you may be aware of mortgage relief companies that claim to provide homeowners with ways to keep their property, refinance or modify their mortgages, repair their credit or simply buy time to stave off debt problems. However, many of these options are scams that cause debtors to take actions that leave them in worse shape.
Foreclosure rescue and loan modification scams can take many forms, but they all seek to take your money without providing you with any real help. These are the most common ones:
- Lease-back or repurchase scams — A company promises to pay off your delinquent mortgage and repair your credit. However, in order to do this, you must first transfer them the deed to your home. The company allows you to stay on as a renter with the option to repurchase the home after a certain amount of time. However, it may become impossible for you to repurchase your home and you may eventually be evicted.
- Partial interest bankruptcy scams — A company convinces you to give them a partial interest in your home. You then make mortgage payments to the company instead of to your lender. However, the company instead files for bankruptcy in your behalf. This will temporarily delay foreclosure but it will not eliminate your mortgage debt.
- Refinance scams — A company offers to refinance your mortgage at lower payments. However, the documents that you sign are actually deed transfer documents, so you are in fact surrendering ownership of your home to the company. You may end up being evicted.
- Internet and phone scams — Some scammers convince you to apply for a low-interest mortgage loan on the phone or online. They ask you for personal information, such as your Social Security number and bank account number, and may ask you to send them money upfront. Once they have your information and money, they disappear.
- Phantom help scams — Someone poses as a housing counselor or lawyer, offering to help you save your home from foreclosure. They will charge you a high fee for their services but they will not provide you with any real help.
If you are considering using a mortgage relief company, it is important to make sure it is licensed and bonded and has a good reputation. You should also be wary of any company that asks for money upfront or that makes promises that sound too good to be true.
You may be better off with Chapter 13 bankruptcy, which allows you to pay off your debts over time under court supervision. This can include the arrears on your mortgage debt. If you complete your Chapter 13 plan and make your regular mortgage payments, you will be able to keep your home.
Jeff Field & Associates helps consumers throughout Georgia discharge eligible debt through Chapter 13 bankruptcy. We have offices in Scottdale, Gainesville, Marietta, Lawrenceville, Douglasville and Athens. To schedule a consultation, call 404-381-1278 or contact us online.