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Tips for Avoiding Foreclosure Scams
For homeowners at risk of losing their homes to foreclosure, there are a lot of resources out there to help, but there are also those who will try to take advantage of people in desperate situations. Here are some tips on how to seek help stopping a foreclosure, and what not to do.
1. If you are facing a foreclosure, contact a HUD-approved housing counseling agency or legal services organization, like the Greater New Orleans Fair Housing Action Center. A list of HUD-approved counseling agencies can be found online at www.hud.gov or by calling the HUD hotline at 1-800-569-4287. HUD-approved counseling agencies do not charge any fees for the services provided, except occasionally to check a homeowner's credit report. 2. Find out about government and private programs that could help reduce your mortgage payments. The Making Home Affordable program offers eligible borrowers loan modifications and refinance loans that can make payments more affordable, and don't require any fees or large contributions. Go to www.makinghomeaffordable.gov to find out more. You should also contact your mortgage company if you have fallen behind on your payments or are having trouble making them to find out if they have any specific programs to help. If you don't contact them, then they will not help you. 3. Do not pay money to any company or individual who claims they can negotiate a loan modification for you for a fee. Also, do not make mortgage payments to anyone other than the mortgage company who services your loan. Any money you pay to a third party could have been used to pay your mortgage or help catch up on missed payments. You do not have to pay a fee to have your loan modified, you only need to request assistance from your mortgage company. 4. Do not take advice from anyone who tells you not to make your mortgage payments. If you have the money available, and your mortgage company is still accepting payments, you should continue to make them, directly to the mortgage company. If you stop making payments, you will only fall further behind and increase the risk of foreclosure. If your mortgage company has stopped accepting payments, then you should save the money you would have paid. 5. Do not trust any company or individual that "guarantees" they can modify your loan or stop a foreclosure. Only your mortgage company can approve a loan modification or stop a foreclosure sale. 6. Do not sign your home over to an individual who says they will rent it back to you and then let you buy it back in the future. Signing over your home means you no longer own it, and the new owner can sell it and have you evicted, while not even making your mortgage payments, which you will still owe. 7. Bankruptcy is not a permanent solution. Bankruptcy will temporarily stop a foreclosure, but you will still owe your mortgage debt, and will need to continue paying it if you want to keep your house. You may have to pay an attorney a large fee to file a bankruptcy, and you could still lose your home. If you are considering bankruptcy, you should talk to a non-profit legal service provider like Southeast Louisiana Legal Services. 8. Don't sign any documents you don't understand, and especially not any documents with blank spaces. You could be fooled into signing over your house, or agreeing to a mortgage payment that you could never afford. Have a housing counselor or attorney review any documents before you sign them. |
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