Top 5 tips to avoid foreclosure rescue scams

Tips to avoid foreclosureIf you bought the house of your dreams, the last thing you want to worry about is the threat of foreclosure and losing your investment. And you certainly don't want to end up dealing with bogus "foreclosure rescue" companies, who only want to take your money and leave you homeless.
The Federal Reserve offers the following five tips to help consumers avoid foreclosure scams.
  • It's not necessary to spend a lot of money. Most agencies approved by HUD provide services for little or no charge. Stay away from anyone who collects a payment before providing services or who will only take a cashier's check or wire transfer. It's always important to always know what exactly you're paying for.
  • If someone guarantees to stop the foreclosure process, that's not a good sign. Be wary of anyone who makes such a promise. Reputable counselors can help prevent foreclosure from happening, but nothing is guaranteed. Get everything in writing first.
  • Read all documents carefully before signing off on them. Don't be rushed. Ask questions and make sure you understand what you're signing. Avoid signing blank forms that a counselor will fill out later. It's a good idea to talk to an attorney before signing off on documents that will transfer the title of your home.
  • Always trust your instincts. Seek help if you think you've fallen victim to a foreclosure scam. The Federal Trade Commission's web site has more information on foreclosure rescue scams. Contact your local and state's consumer protection agencies. You can find out more about such agencies on the Consumer Action website.
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