Legitimate programs and professionals exist to help homeowners who face foreclosure. Unfortunately, some companies and individuals who appear to be helpful are just the opposite. Chicago-area homeowners who find themselves in a difficult, sometimes desperate, situation should be on the lookout for signs of loan modification scams.
Signals that a scammer's plan to rescue a home is too good to be true include:
- Telling the homeowner not to contact a lawyer or the lender
- Recommending that the homeowner pay the scammer rather than the mortgage holder
- Guaranteeing that the homeowner's home will be saved via loan modification or stopping foreclosure
- Insisting on payment by cash, wire transfer or cashier's check
- Filling out paperwork on behalf of the homeowner
- Not providing copies of documents signed by the homeowner
- Compelling the homeowner to sign documents that the homeowner has not had the opportunity to thoroughly read or understand
- Asking the homeowner to transfer the title or deed to the property to the scammer
If the scammer offers to buy the homeowner's home and lease it back, with the stated plan to let the homeowner buy the house again later, the homeowner should be wary. In most of these cases, this is a ploy to buy the home at a low price and force the homeowner out.
Bankruptcy and the Foreclosure Process
For homeowners experiencing the possibility of both foreclosure and bankruptcy, the timing of the bankruptcy could be vital. It is important to file at the proper time so that the homeowner's interests can be protected.
Filing bankruptcy to eliminate unsecured debt could leave a homeowner with the ability to make mortgage payments. In making these decisions, Chicago-area homeowners should take care to work only with legitimate, experienced professionals and attorneys.