Florida has the highest number of foreclosures in America. Moreover, 7 cities in the Sunshine State made the top 10 list of metro cities with highest rates of foreclosure. Jacksonville placed at number 8. Recent statistics show that foreclosure proceedings affected 1 in every 202 homes in Jacksonville.
With statistics like these, homeowners facing the prospect of losing their homes are vulnerable to foreclosure relief scams. Many companies approach distressed property owners claiming that they can lower their mortgage payments. Some even offer a “money-back guarantee” of positive results. However, scammers don’t deliver on their promises and often leave homeowners in a worse financial position than before.
The Federal Trade Commission provides warning signs to help consumers recognize potential scam artists. Scam artists use a variety of tactics. Here are some of the more common ones:
- Service to Negotiate scam — The scammers charge a fee for this fake service to negotiate lower monthly mortgage payments with lenders. They may even require you to make your mortgage payments directly to them during the “negotiations”. The scammers disappear after collecting a few payments.
- Foreclosure Prevention Audit scam — Scam artists charge a fee for a forensic audit that an attorney or other expert provides. They claim the audit will determine if your lender complied with the law. The scammers further claim that you can use the audit to avoid foreclosure, cancel a loan or leverage a loan modification.
- Rent to Buy scam — In this scheme, the con-artist convinces you to sign title to your home over to them to avoid foreclosure or improve your credit rating. After you transfer title, they may raise your rent to an amount you cannot pay and then evict you when you miss a payment. Or the scammers offer to sell the house back to you at a price you cannot afford. In either version of this scheme, the homeowner loses the property.