One method is that home owners in danger of foreclosure are identified and sent a letter stating that the company is aware that these times are difficult and that they are there to assist home owners in danger of foreclosure. A toll-free number is listed and they are urged to call.
When the home owner calls the company, they are talked into paying an upfront fee of as much as twelve or fifteen hundred dollars to help with their distressed mortgage. Then nothing happens and the home owner goes into foreclosure anyway.
A lawyer for the Federal Trade Commission, Harold Kirtz, states that many of the victims of these scams are educated, financially savvy people who are in very distressing situations.
Below are some red flags to be on the lookout for in identifying a potential scam:
-The company asks for money upfront. Not all advance fees are illegal, but most instances of this up charge have been proven bogus.
-The company guarantees you success. There is never a guarantee that any lender will not foreclose or offer any loan modification.
-The company requests that all mortgage payment checks be sent through them to the lender. One guarantee here is that the company will probably cash the checks.
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