What are some foreclosure scams to watch out for?

Missing mortgage payments and facing foreclosure in Connecticut is a serious financial situation, and you may not know where to turn for help. Unfortunately, there are unscrupulous people out there who view your misfortune as an opportunity to profit from your pain. They may offer you ways out of your financial difficulty that may seem too good to be true, and according to FindLaw, that is because they are usually scams designed to cheat you out of your home by taking advantage of your desperation. 

In particular, be wary of financial counseling agencies. Some of these are legitimate and offer services such as helping you to negotiate payment plans with creditors. However, others are scams and will charge you a fee for services they will never perform on your behalf. Before you pay any money to or sign any agreement with a counseling agency, be sure to research it to ensure it is reputable and trustworthy. 

At all costs, avoid signing over your deed to a lender who offers to help you refinance your home. Despite promises that the arrangement is temporary, the lender is unlikely to reverse it and sign the deed back over to you. Rather, he or she will probably start acting like a landlord, evicting you from the property, treating you like a tenant or selling the property out from under your feet. 

Another common foreclosure scam is the balloon payment. You may refinance your loan with a trustworthy-seeming lender and pay a lower monthly payment, only to find out at the end of the loan term that your payments have only gone to pay interest and now the entire original loan amount is due at once. 

Selling your home may be an alternative to foreclosure but even here, scam artists may try to rush you through the process or pressure you into an arrangement that is not in your interest. Be assertive in resisting these techniques, and never sign an agreement that you do not understand. 

The information in this article is not intended as legal advice but provided for educational purposes only.