What is a foreclosure rescue scam?

A foreclosure rescue scam is an illegal activity whereby individuals or companies offer services to homeowners facing foreclosure in order to supposedly save their homes. These services can include working out a loan modification plan with the lender or helping to refinance the mortgage debt. In California, foreclosure rescue scams typically involve advance fees or promises that guarantee a positive outcome. Homeowners are often told that they need to make payments before a loan modification can be negotiated or that the company is legally allowed to provide a foreclosure rescue service. In reality, the services offered by foreclosure rescue companies are often fraudulent or ineffective. These companies may not have the authority to negotiate with the lender, or may be unable to provide the services promised. Homeowners may make payments to these companies but are unable to obtain loan modifications or other benefits. Legitimate foreclosure rescue services do exist, but they usually do not require upfront fees and do not guarantee success. Homeowners should research companies thoroughly before signing any contracts or making any payments. They should also check with their lender to see if a loan modification is a possibility. California homeowners should also always seek the advice of a legal professional before making any payments or agreeing to any terms with a foreclosure rescue company.

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What is a foreclosure rescue scam?

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