Facing foreclosure? What not to do

You’ve been served with a foreclosure action. Like many people, you are probably receiving lots of advice and unsolicited mail and telephone calls urging you to take one action or another. Foreclosure is overwhelming enough and now you have to decide what to do. Depending on your situation, there may be options for you and picking the best one is a matter of understanding the facts and circumstances and reviewing them with someone who is knowledgeable about both the law and the foreclosure process. If you make the wrong first move, your foreclosure action may be over before you have a chance to decide. Below some common mistakes made by homeowners facing foreclosure.

1. Do nothing: Remember when you were a little kid and you’d hide under the covers when you were scared? Many people have that same reaction as adults. If they ignore a problem, it will go away. In the case of foreclosure, the only thing that will go away if you ignore it is your house and the possibility of your keeping it or avoiding a judgment of foreclosure against you.
2. Go to court without representation: Some people decide that they will wait until there is a court date. At that point, they figure they will show up, tell the judge their story and he/she will not allow this to happen. This does not work because, while a judge may sympathize with your situation, the judge is required to follow the law. In order to prevent a foreclosure, you need to have a legal defense.
3. Fall victim to a scam: Unfortunately, there are people out there seeking to take advantage of homeowners who have been served with a foreclosure action. In a previous post, I discussed some of the more prominent foreclosure scams. Beware of any non lawyer who charges an upfront fee, anyone who offers to help by taking title to your home, or placing your home “in trust” while you work with the bank or any phone offers promising to stop foreclosure. Sadly, these scams exist and many who are already in an unfortunate situation have become victims.

Foreclosure consulting firms sued for fraud

In the last post, I discussed the Attorney Generals attempts to prevent fraud against homeowners facing foreclosure. The following are several companies under investigation for allegedly fraudulent practices:

National Foreclosure Counseling Services Corp: The Attorney General's Economic Crimes Division determined that National Foreclosure Counseling Services Corp sent mailings to homeowners facing foreclosure implying that they were a government agency, claiming that the recipients had been selected for special programs and stating that this was the last attempt to assist the homeowner before foreclosure. The Attorney General has filed suit, claiming that National Foreclosure charged up front fees and failed to perform services following payment.

Keep Your Property Inc: The Attorney General's investigation revealed that Keep Your Property promised homeowners facing foreclosure that it would prevent foreclosure, negotiate a lower interest rate with the lender and lower the principal balance of the mortgage. Keep Your Property Inc also charged a large upfront fee and it was reported that the company made no contact with the lenders.

Mortgage Crisis Solutions LLC: The Miami based firm is accused of charging large up front fees, not providing services and improperly advertising legal services and counsel.

Homeowners facing foreclosure should be familiar with the Florida foreclosure fraud law and know that non-attorney firms and "foreclosure consultants" cannot charge upfront fees. Non-lawyers cannot provide legal advice either. And no one can guarantee that there services will "stop" a foreclosure. Homeowners should be suspicious of any of these tactics.

If you have been sued for foreclosure, it is highly recommended that you consult with an attorney and discuss your rights and options.

Foreclosure rescue scams: beware of consultants, counsellors and other means of fraud

Facing foreclosure is scary enough, but those Floridians seeking to avoid foreclosure have to be wary of foreclosure scams as well. There are numerous "foreclosure assistance" and "foreclosure counselling firms" who promise to stop foreclosure, only to take money and give nothing in return.

About a year ago, the Florida foreclosure fraud protection act became law. In a nutshell, the law requires any non-lawyer offering to help stop, delay or avoid foreclosure to provide a written agreement and to accept payment only when all services have been provided. The law is designed to deter those "foreclosure consultants" who, with little or no credentials, take money from unsuspecting homeowners and simply disappear.

The act will not stop scam artists from trying to take money from people facing foreclosure. However, homeowners who know their rights are better able to avoid such scams.

Be wary of anyone who calls unsolicited offering to "stop foreclosure" or any advertisement promising something similar.

The Florida attorney general's website offers more useful information on avoiding foreclosure scams as well as a list of companies currently under investigation. For more information visit www.myfloridalegal.com