If you are facing Foreclosure you can be inundated by phone calls. Please keep in mind that foreclosures are running rampant across the US and so are Foreclosure and real estate scams. There are literally thousands of people that are looking to get you to sell your home and your precious memories. DO NOT BE A VICTIM.

In a previous article titled “Homeowners Beware” I listed a few things to be on the lookout for and ways you can eliminate copanies that may be lying to you or trying to force your hand into a sale.

A company that truly wants to help will offer their terms in writing and offer a 100% guarantee BEFORE any money is paid or papers are signed.

Some interesting scams I heard on the wire was Lease Option scams. What happens in these cases is an investor will offer to get you out of debt by buying the home from you and catching the mortgage up. At the end of this lease term, usually a year or two, you have an option to buy the home at an agreed upon price. There are three different scenarios here that should alert you of a scam or an unethical practice:

1. There will be a clause in the lease contract that states if the homeowner is 24 hours late on their payments then the Lessor has the right to take posession of the property immediately.
2. The investor will make promises that they will pay all mortgage payments. The mortgage payments are not made and the house will slip into Foreclosure yet again but there is nothing you can do because the home is not in your name.
3. The last, and probably the most borderline, is the amount of the purchase price. Some investors, especially if the home has a decent LTV (Loan To Value) ratio, will inflate the price to almost 100% of the actual home value thereby sucking out any equity at all. A typical lease option will add some fees and closing costs in addition to a reasonable % of the loan balance.

Now another scam you should be extremely warey of involves short sales. This is where an investor will approach you and ask for permission to negotiate directly with the lender to purchase the home. Now this in itself is not unethical and can sometimes be a solution when a home value has dropped close to or under the loan balance.

Most times, if they are taking advantage, they will not disclose any out of pocket costs. In fact, they will tell you quite the opposite. If they are legitimate they will explain (depending on your state law) what defficiencies you will be responsible for and how they will be collected.

In some states, an IRS Form 1099 is issued in the amount of the deficiency, which will be titled Forgiveness of Debt. This 1099 will have to be reported as income and you will then be responsible for paying taxes on this amount. In other states the lender will actually send you a bill for this amount.

Let me briefly explain an example. If you own a home that has a value of $110,000 and the loan balance is $100,000, the investor will offer the lender an amount below the loan balance amount. Let’s assume that the amount the lendor offers the investor is $80,000. The deficiency would be the difference between the offer from the investor and the loan balance. Depending on your state laws you will be responsible for this $20,000 in some form or another.

The key here is disclosure. Now in all fairness there is an option to submit a waiver request to the lender when submitting the short sale proposal. For example, in a state that does allow a deficiency judgement, instead of getting a judgement placed on you for the total deficiency, you will receive a 1099 which you will report as income on your income tax return for the appropriate year.

My point with short sales is not to discount their ability to assist, but rather warn you that there will be out of pocket expenses at some point or another.

This whole article was written to encourage homeowners to do their homework. Do not just go with the first company that sweeps you off your feet with empty promises. Foreclosure is not pretty, but being taken advantage of when in a Foreclosure or preforeclosure situation is even worse.

By: Donna Atwater (cfreedom) for more information about your options please visit our website and fill in our brief application and one of our experienced consultants will contact you within 24 hours.

Homeowners please be on the lookout for uninformed, half wit, scammers looking to prey on your weaknesses. If you are facing Foreclosure please take time to do your research on the company you are dealing with.

1. Ask for credentials!
2. Ask for the company’s full and legal name and what state they are registered in.
3. Ask them to put everything in writing.
4. Ask the person you are talking to how they are qualified to assist you.
5. Don’t be afraid to tell them you aren’t SELLING!
6. Ask them the percentage of homes they save as opposed to sell.
7. And finally, ask them about their track record!

Still don’t be fooled. Many companies will have a good answer for you. It is your DUTY to verify these numbers. Ask them how long they have been in business and then verify that yourself.

Let me explain where this is coming from. This week was a very trying week for me. I am a loss mitigation Consultant. For those of you not familiar with loss mitigation itself, it is simply negotiating with a lender on behalf of a homeowner facing Foreclosure. loss mitigation is the first thing you should attempt when trying to save your home. There are two requirements when finding out if a homeowner may qualify and they are:

• Is there hardship (financial bump in the road) over?
• Are they able to resume their REGULAR monthly payments.

If a homeowner can answer yes to both these questions there is a strong possibility that they can be helped through loss mitigation. This is a cost effective way to get back on your feet and back on track with the lender.

I didn’t want to talk about the service so much as I did the people taking advantage of the ever growing number of foreclosures. This week I was visiting a forum. Now I am not very forum savy but a friend asked me to answer a post so I did. While in there I discovered a group of people that belonged to this unmentioned company. Suffice it to say that they apparently felt they were worthy competitors of ours. At any rate, someone simply asked about our services and I replied and one thing led to another. Needless to say the conversation went to places that I didn’t think adult women were capable of going. Throughout the whole conversation I saw passion. What I didn’t see was the company itself doing any good other than an absolute disservice to homeowners who are faced with a devastating Foreclosure.

I am not one to judge, and the individuals there, I am not judging. But the company boasts proudly that ONLY 15% of homeowners qualify for loss mitigation. The rest are HIGH interest Foreclosure bail out loans, investment deals and short sales. This, to me, is the absolute most horrible thing I have ever heard. With 9 out of 10 homeowners having a strong desire to stay in their homes how on earth could you brainwash hundreds of people into believing this is acceptable?

It was apparent to me that the CEO’s main interest was flooding the gates to get as many deals as they could. Now, their marketing materials say they can save 90% of the homes from Foreclosure. That in itself is very misleading. When I say we can SAVE your home from Foreclosure, I mean that we can actually keep you in the home! Saving a home does not mean selling to me. Maybe I am wrong on this one but please give me your feedback here.

I am elated that I was not pulled into those “Free to work at home” opportunities that brainwashed me into thinking I was actually providing a service to homeowners. I care deeply about my clients and only trust them with the best of companies. I would never farm them out to multiple vendors I know nothing about or how they will be treated. People, we are Americans and our country needs our help. Don’t be a bottom feeder and take advantage of your fellow Americans that are already in a tough spot! Please step back and do something good for them.

Bottom line - If you aren’t 100% dedicated to helping them then get out of the kitchen. Please don’t hurt any more people with your lies and lack of education and understanding of the Foreclosure process.