People in foreclosure are frequently targeted for “foreclosure rescue scams.” Be very careful of non-lawyers who ask you to pay a fee for a counseling service, modification of an existing loan, or foreclosure prevention, or claim to be able to perform a “forensic audit” of your loan documents, regardless of their promises or claims. Many out-of-state attorneys target Connecticut residents: you should never pay attorneys that you do not meet.

In some of these “rescue” scams, a con artist promises to help you save your home, but is actually intent on stealing your home or most of the equity you have accumulated in your home.  According to the FTC, the following predatory scams have been reported: 

• The foreclosure prevention specialist: The “specialist” really is a phony counselor who charges hefty fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for himself. None of the actions result in saving the home.  Turning to a HUD-approved counselor for assistance is one way to avoid this type of fraud.

• The lease/buy back: Homeowners are deceived into signing over the deed to their home to a scam artist who tells them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, the homeowner gets evicted, and the “rescuer” walks off with most or all of the equity.

• The bait-and-switch: Homeowners think they are signing documents to bring the mortgage current. Instead, they are signing over the deed to their home. Homeowners usually don’t know they’ve been scammed until they get an eviction notice.

• Prevent Loan Scams 
• Loan Modification Scam Alert