07/03/2009

News / 5 Tips for Avoiding Foreclosure Scams

1. Work only with a nonprofit, HUD-approved
counselor.
If you are looking for help to prevent foreclosure
(www.federalreserve.gov/pubs/foreclosuretips/
default.htm), be sure the counseling agency is on the
Department of Housing and Urban Development’s
list of approved agencies. Visit HUD’s website for
an easily searchable list of HUD-approved housing
counseling agencies (www.hud.gov/offices/hsg/sfh/
hcc/hcs.cfm), or call 877-HUD-1515 (877-483-1515) for
more information. If you are approached by foreclosure
counselors—by mail, phone, or in person—make
sure the counseling agency is HUD-approved before
you do business with them.
2. Don’t pay an arm and a leg.
You should not have to pay hundreds—or thousands—
of dollars. Most HUD-approved housing counselors
provide no-cost counseling services and many more
provide low-cost counseling. Do not agree to work
with a counselor who collects a fee before providing
you with any services or who accepts payment only
by cashier’s check or wire transfer. In general, do not
pay money to anyone unless you know exactly what
services you will receive.
3. Be wary of “guarantees.”
A reputable counselor will not guarantee to
stop the foreclosure process, no matter what
your circumstances. Working with a legitimate
counselor can certainly increase your
chances of keeping your home—but be wary
of people who promise a sure thing. Again,
get the details of your transaction, along with
any promises, in writing first.
4. Know what you are signing—and be
sure you sign it.
Don’t let a counselor pressure you to sign
paperwork you haven’t had a chance to read
through carefully or that you don’t understand.
Don’t sign any blank forms or let “the counselor”
fill out forms for you. Be sure to talk with an attorney
before signing anything that transfers the title of your
home to another party.
5. If it sounds too good to be true, it probably is.
If you feel you may be the target or victim of foreclosure
fraud, trust your instincts and seek help. For
tips on spotting scam artists, visit the Federal Trade
Commission’s webpage on foreclosure rescue scams
(www.ftc.gov/bcp/edu/pubs/consumer/credit/
cre42.shtm). Report suspicious schemes to your state
and local consumer protection agencies, which you
can find on the Federal Citizen Information Center’s
Consumer Action Website (www.consumeraction.gov/
caw_state_resources.shtml).

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