Avoiding foreclosure scams

BIRMINGHAM, AL (WBRC) - The number of homeowners behind on their payments in Birmingham is up 50% over last year and now scam artists are targeting families in desperate need of help.

In the last 7 months, Neighborhood Housing Services of Birmingham has helped more than 600 families keep their homes out of foreclosure, but John Colon of NHS says that good deed isn't enough to wipe away the anger from seeing other homeowners victimized by scammers.

"We're seeing almost every day a family comes into our office and says 'hey i just paid $2500, my lifesavings, to help me avoid foreclosure and I can't get the company to call me back. They have taken my money, there's nothing. I have a foreclosure date in 3 days, what can you do?' and at that point there's nothing we can do," Colon said.

Colon says scammers are preying on homeowners by promising bridge loans or help negotiating with banks in exchange for payment upfront.

"What they usually try to do is swindle those families out of their homes by offering a program in exchange of the deed to help them avoid foreclosure."

But scammers run off with the deeds and homeowners are left without a house and out several thousand dollars they paid. So how do you avoid becoming a victim? First, don't pay anything upfront.

"If they're charging you upfront fees and promising you you'll be able to avoid foreclosure, chances are they're a scam artists," Colon said.

Colon also recommends asking for and then calling references first. Don't release any financial or mortgage information over the phone or even in person to anyone other than your mortgage lender. Colon says foreclosure help that's government-approved should be free.

"The old adage that you pay for what you get does not apply in this case," Colon said.

Click here to find a HUD-approved foreclosure counseling service.

Click here if you think you've been the victim of a scam.