How to Avoid Florida Foreclosure Scams

As defaults on Florida home loans continue to plague various regions in the state, now is a good time to review ways in which you can avoid foreclosure scams.

1: How it works
First, let’s take a look at what the trends are. There are triple-digit percentage gains of foreclosures from last year in places such as Nevada, Wyoming and Alabama. Generally, areas under economic stress tend to have more foreclosures.

As a general rule of thumb, foreclosure rates tend to go up in colder months simply because fewer houses are sold, according to Rick Sharga of RealtyTrac. Foreclosure rescue scams are deals that proclaim to “save your house” or “pay your Florida mortgage.” Don’t be fooled.

In one foreclosure scam scenario, you - the homeowner - surrender the title to your house thinking you’ll become a renter and buy the house back over a few years.

For the most part, you’ll lose your house and won’t be able to buy it back … and the scam artists walk away with all your equity. Sometimes homeowners just sign a bunch of documents, not even realizing they’ve signed over ownership of the house.

In other cases, scammers will call themselves foreclosure consultants. They’ll promise to persuade your lender to negotiate, or they promise to find a buyer for the house.

2: Contact your lender ASAP
If you have received a foreclosure notice, or even if you feel you won’t be able to make your Florida mortgage loan payments, contact your lender immediately. You may be able to negotiate your payment schedule.

Lenders do not want clients to default because it’s expensive for them, says Todd Beitler, a foreclosure expert.
3: Know the warning signs
The Department of Justice outlines a few red flags that you should keep in mind if you find yourself behind on your mortgage payments or facing foreclosure.

First, be suspicious of any person or company that calls itself a Florida mortgage consultant or a “foreclosure service.” These often lead to fraud.

Be wary of marketing procedures. Don’t trust anyone who uses flyers or solicits for business door-to-door. Be suspicious of offers to lease back your home, so you can buy it back over time. These offers are weighted against you.

And of course, don’t fall for promises that seem too good to be true. Watch for promises that lure homeowners into deals. These offers may include promises to “save your credit” or maybe the company promises to “find a buyer within seven days.”

4: Get it in writing
Never be pressured to sign a contract. Review the paperwork with a lawyer and don’t sign anything that has any blank lines or spaces. Information could be added later and you won’t know about it.

Remember, verbal agreements don’t mean anything. You’ll want to get everything in writing and make copies of the paperwork. Legitimate companies will sit down with a homeowner and collect documentation. They will put together a package and present it to your Florida home loan lender.