When you are in a situation where your bank might foreclose on your mortgage, you might feel desperate enough to listen to any company that claims they can get you out of your jam. Unfortunately, there are parties out there who want to scam you out of your money by offering services that they will not deliver on.
As the Federal Trade Commission explains, these scam artists will try to draw you in with proclamations that they can stop your foreclosure or negotiate a better deal with your bank. But to benefit from their services, they will ask you to open your wallet first.
Making promises in exchange for cash
Scam artists generally work in the same way. They will ask you to pay a fee to them. In exchange, they will negotiate with your bank to save your residence from foreclosure or otherwise help you avoid defaulting on your payments. They will tell you not to contact your bank, attorney or a credit counselor. They might ask you for multiple fees or for you to make your mortgage payments to them while they deal with your lender.
But this arrangement does not last long. After a while, you notice you have received no further word from your supposed rescue agency. This is because the scammers have disappeared with your money. They have done nothing to help you, and you are now in an even worse position than you were before.
You have the right to disclosure
The FTC makes it clear that companies should describe key information in advertisements and telemarketing communications. They should say that they have no government association and have no approval from your bank or the government to render their services. They should point out that your lender might choose not to alter your loan terms.
A company should also make it clear that you run the risk of damaging your credit score and instigating a foreclosure if you stop making mortgage payments. Finally, a company cannot tell you to stop talking to your lender. Your bank might have options on hand to help you avoid foreclosure, and a business should never make you feel you cannot approach your lender for help.