If It’s Too Good to be True,

It Probably Is

Beware of Foreclosure

Rescue Scams

To protect yourself from opportunity hunters and frauds: 

 • Contact your lender or mortgage loan servicer and try to

 negotiate a payment plan.

 • W

 counselors. 

 • Report suspicious activit

.

Read more inside or go to the resources section on the back panel 

for whom to contact for immediate help.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General Resources

FDIC Foreclosure Prevention Website

www.fdic.gov/foreclosureprevention

(877) ASKFDIC or (877) 275-3342

Mortgage Modification and Refinance Programs

 • Making Home Affordable

 www.makinghomeaffordable.gov/

 • Federal Housing Administration

 http://portal.hud.gov/

 (800) CALL-FHA or (800) 225-5342

Foreclosure Mitigation Assistance and Counseling

 • U.S. Department of Housing and Urban Development

 www. gov/offices/hsg/sfh/hcc/fc/ or www.hud.gov

 (800) 569-4287

 • Homeownership Preservation Foundation

 www.995hope.org

 (888) 995-HOPE

 • NeighborWorks America

 www.neighborworks.org/Our-Network/ Network-Directory

Report Foreclosure Scams

 • Federal Trade Commission

 www.ftccomplaintassistant.gov/

 • Consumer Financial Protection Bureau

 www.consumerfinance.gov/complaint.

 

 • State Attorney General Contact List

 www.naag.org/attorneys_general.php

 • State, County and City Consumer Protection Offices

 www.usa.gov/state-consumer

Beware of Mortgage 

Rescue Scams Protect Yourself

Know with whom you are dealing. 

Before you hand over any money or pro-

vide any personal information, check out 

the company or person. You can check 

your local Better Business Bureau or state 

consumer protection office to see if the 

company or organization is legitimate 

and if any complaints have been filed. 

Contact reputable non-profit housing or financial counsel-

ors, such as those you can find by contacting the: • U.S. Department of Housing and Urban Development 

 (HUD) at (800) 569-4287 or 

 www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm • Homeownership Preservation Foundation at 

 (888) 995-HOPE or www.995hope.org.

Know what you are signing. Read and understand every docu-

ment you sign. If a document is too complex, seek advice from a 

lawyer or trusted financial counselor. Never sign documents with 

blank spaces that can be filled in later. Never sign a document that 

contains errors or false statements, even if someone promises to 

correct them later. 

Get promises in writing. Oral promises and agreements relating 

to your home are usually not legally binding. Protect your rights 

with a written document or contract signed by the person making 

the promise. Keep copies of all documents you sign. 

Make your mortgage payments directly to your lender or the 

mortgage servicer. Do not trust anyone else to make mortgage 

payments for you. 

Never sign over your deed until you clearly understand what 

will happen to your rights to your home. Foreclosure scams 

often require you to “temporarily” sign over ownership of your 

home to another claiming it would be only as a means to help you. 

Consult with a HUD-approved homeowner counseling agency.

Report suspicious activity to the Federal Trade Commission, 

your State Attorney General’s Office or your state and local con-

sumer protection agencies. Reporting con artists and suspicious 

schemes helps prevent others from becoming victims.

Federal Deposit Insurance Corporation

www.fdic.gov/foreclosureprevention

FDIC-021-2015 (3/2016, PDF)
Beware of Unethical Mortgage Foreclosure 

Rescue Operators

A fairly new and dangerous threat has arisen for homeowners 

who have fallen behind on their mortgage payments and may be 

at risk of foreclosure – opportunistic companies. They often refer to 

themselves as a “foreclosure consultant” or “mortgage consultant,” 

and market themselves as a “foreclosure service” or “foreclosure 

rescue agency.” They count on homeowners being vulnerable and 

desperate. 

These companies claim they can assist homeowners facing 

foreclosure with options that allow them to keep their property, 

refinance or modify an existing mortgage, repair credit or help “buy 

more time.” In reality, these “options” are intended to convince you 

to take the wrong steps so they can take your money and possibly 

your home. 

Remember the old saying, “If it’s too good to be true, it probably is.” 

Be safe. It is important that you take action by contacting your 

mortgage lender – or any legitimate financial counselor – to find 

real options to avoid foreclosure. A number of agencies provide 

free counseling services to homeowners who are having trouble 

making ends meet (see the “Protect Yourself and Resources Sections”). 

These agencies can help you explore your options, which may 

range from modifying your loan to refinancing your loan to selling 

your home and using any equity to start over.

Watch Out for the Common 

Foreclosure Rescue Scams 

Lease-Back or Repurchase Scams – In this scenario, a promise is made to pay off your delinquent 

mortgage, repair your credit and possibly pay off credit 

cards and other debt. However, in order to do this, you 

must “temporarily” sign your deed over to a “third party” investor. 

You are allowed to stay in the home as a renter with the option to 

purchase the home back after a certain amount of time has passed 

or your financial situation improves. The trouble is once you have 

signed away your rights in your property, you may not be able to 

repurchase the property later, even if you can and want to. After 

the new owner takes ownership of your property, the new owner 

can evict you. Furthermore, the scammer is under no obligation to 

sell the house back to you. Typically, after the deed is signed away, 

Warning Signs That You May Be Dealing 

With A Mortgage Foreclosure Scam Operator 

If The Company:

Demands a fee in advance. No legitimate organization that works 

with borrowers to avoid foreclosure will ever ask for money 

up front.

YZ

Makes unsolicited offers or “lofty” advertisements, 

claiming they can help save your home.

YZ

Recommends you break off contact with the lender and any 

counselor that you may have been working with.

YZ

Advises you to stop making mortgage payments.

YZ

Tells you to send your mortgage payment to anyone other than 

your loan servicer. 

YZ

Instructs you to transfer ownership of your property. 

YZ

Makes verbal promises that aren’t put in writing. 

YZ

Asks you to sign a document that has blank lines or spaces. 

the property changes hands numerous times. The scammer may 

have taken a new mortgage out on your home for hundreds of 

thousands of dollars more than your mortgage, making it impossible for you to buy back your home.

Partial Interest Bankruptcy Scams – The scam operator asks 

you to give a partial interest in your home to one or more persons. 

You then make mortgage payments to the scam operator in lieu of 

paying the delinquent mortgage. However, the scam operator does 

not pay the existing mortgage or seek new financing. Each holder 

of a partial interest then files bankruptcy, one after another, without your knowledge. The bankruptcy court will issue a “stay” order 

each time to stop foreclosure temporarily. However, the stay does 

not excuse you from making payments or from repaying the full 

amount of your loan. This complicates and delays foreclosure, while 

allowing the scam operator to maintain a stream of income by 

collecting payments from you, the victim. Bankruptcy laws provide 

important protections to consumers. This scam can only temporarily delay foreclosure, and may keep you from using bankruptcy laws 

legitimately to address your financial problems.  

Refinance Scams – While there are legitimate refinancing programs available, look out for people posing as mortgage brokers 

or lenders offering to refinance your loan so you can afford the 

payments. The scammer presents you with “foreclosure rescue” 

loan documents to sign. You are told that the documents are for a 

refinance loan that will bring the mortgage current. What you don’t 

realize is that you are surrendering ownership of your home. The 

“loan” documents are actually deed transfer documents, and the 

scammer counts on your not actually reading the paperwork. Once 

the deed transfer is executed, you believe your home has been rescued from foreclosure for months or even years until you receive an 

eviction notice and discover you no longer own your home. At that 

point, it is often too late to do anything about the deed transfer. 

Internet and Phone Scams - Some scam lenders convince you 

to apply for a low-interest mortgage loan on the phone or Internet. 

They then extract vital information, such as your social security 

and bank account numbers. In this scam, the loan is immediately 

accepted, after which you start faxing the documents and sending wire transfer payments to the phony company without even 

meeting the lender. Unfortunately, this scam will put you in twice 

as much trouble--your personal details have been stolen or sold, 

putting you at risk of identity theft, and your home is still at risk of 

foreclosure.

Phantom Help Scams - The scam operator presents himself as 

someone who is able to counsel or help a homeowner out of foreclosure. In exchange for his or her “services,” outrageous fees are 

charged and grand promises are made for robust representation, 

which never occurs. The “services” performed entail light paperwork or occasional phone calls that you could easily have made 

yourself. In the end, you are worse off than before, because you 

have little or no time to save your home, or seek other assistance.

Caught in a Foreclosure Scam?

If you get caught in one of these scams, it is imperative that you 

contact a lawyer right away. An attorney can assist you as you 

navigate your way through the process. Lower income individuals 

may be able to find free legal services; see 

http://www.findlegalhelp.org.

If you believe that you are the victim of criminal activity, such as 

forged documents being presented for your signature, you should 

contact your local law enforcement agency. 

Tips for Avoiding Mortgage 

Foreclosure Rescue Scams