Wherever there are people in financial difficulty there will be con men and scammers eager to pick up the pieces and take what little you have left. They prey on people’s fears and problems. Even some “reputable,” financial institutions are a party to these sort of scams. These scams vary from overpriced loans to some situations where you will find yourself evicted from your property and still responsible for the debt or worse, renters in your own home. These are how to avoid being conned:

1. Avoid anyone who is charging a fee to help you stop foreclosure. Everything they can suggest or offer is available for free. I mean EVERYTHING – there is nothing they can do that warrants charging you a fee. If they can help you stop foreclosure, you can already do it yourself. The fancier the mailer or TV or internet ad – the more likely it is to be a scam. They are spending your money advertising. The internet can be a great resource, but it is also full of people trying to take money from you.

2. Avoid anyone who guarantees they can stop foreclosure. There is only really one way to stop foreclosure – by paying the loan, either by restructuring the existing loan, refinancing from another lender or selling the property. There is NO other way. No magic “loophole,” that will allow you another way. This is it. NO OTHER WAYS. Never ever sign anything from a company guaranteeing to stop foreclosure. Do not be fooled into leasing your home with a promise of being able to buy it back later.

3. Do not let the advertiser scare you into doing something rash. Do not listen to this sort of scaremongering. It’s bad enough that you are facing foreclosure without someone saying things like this:

“If your house payments are more than a month behind, your lender has probably already started foreclosure proceedings. As time passes thousands of dollars in penalties and legal fees can be added to the balance you owe. And every single day extra interest is added!”

They are quite right – the sooner you face the problem the better, but this is designed to scare you into using them.

4. Throw away any flyer that comes through your mail box promising to help you. Turn away anyone who knocks on your door and says he has a rescue package – he’s probably the guy who sold you a loan that he knew you wouldn’t be able to repay in the first place

If you are facing the prospect of foreclosure, the first thing to do is talk to your lender. Even if the process has already begun. Right up until the Sheriff evicts you – talk to your lender. Get them to help you restructure or refinance. They do not want to add your house to their growing collection of seized property. Most lenders have a loss mitigation department whose sole function is to restructure you loan so that you can keep paying them.