As state and federal forbearance programs come to an end, it has sent many homeowners into a panic. Without the foreclosure protection residents in Broward County have been enjoying for the past 14 months, many residents are in fear of losing their home. While Florida is not likely to see the same collapse of the housing market we did back in 2008, it is simply a fact that foreclosures are going to start increasing. In fact, there was already an increase in foreclosure activity in April, and Pensacola had the third-highest rate of foreclosures of all cities with a population over 200,000. As a state, Florida had the fourth-highest number of foreclosures in the country.
The news is grim and some homeowners might try to find relief in a foreclosure rescue company. Unfortunately, these companies are usually trying to take advantage of homeowners rather than help them. The only real professional that can help you keep your home is a foreclosure defense lawyer in Broward County. If you are in fear of losing your home, outlined below are some of the most common foreclosure scams in Florida, and how to avoid them.
Mortgage Modification Scams
If you are finding it difficult to pay your mortgage, you may have a number of options still available to you. You can apply for a repayment plan, a forbearance agreement, or a loan modification. Typically, all you need to successfully use one of these options is a foreclosure defense lawyer who can negotiate on your behalf. Often, though, other companies known as loan modification companies will send you material in an attempt to get you to contact them.
The communications loan modification companies send typically look fairly official. They try to make their mailings look as though they came from a government official, or they guarantee they can stop your foreclosure. Truthfully, no one can tell you if they can stop the foreclosure without fully looking at the facts of your case.
These companies are simply trying to get you to call them so they can persuade you to pay them instead of your mortgage lender or servicer. Once they have your money, they then forget about your case and move on to the next person they can scam. Even if they continue working with the homeowner, they will charge exorbitant fees for a service you could have done with little or no assistance, such as contacting your servicer.
Forensic Loan Audits
The forensic loan audit scheme involves an auditor that will review your mortgage paperwork to determine if the lender violated the law. Although it is true that legal violations can help save your home from foreclosure, these types of audits do not usually turn up too many errors. These companies typically use a compliance software program that does not have the capacity to perform an in-depth review of your case necessary to spot violations.
The loan auditor may also tell you they will use the results of your audit to force the servicer into offering a modification, which just is not true. Of course, for this supposed service they will charge you high fees for which you will get very little value. To have any effect after finding a mistake, you would have to answer a foreclosure lawsuit or file your own lawsuit, for which you need an attorney.
Banks often use securitization methods, which involve bundling mortgage loans with similar characteristics and selling them to another company. A securitization audit then, will determine if your mortgage loan was one that was sold and if so, whether the process was done correctly.
A securitization audit can reveal certain information, but the problem with paying someone to do this for you is that the information is usually publicly available and you do not have to pay a fee for it. The auditor will not be able to give you any sound legal advice, and they may not even point out certain violations that could serve as a foreclosure defense.
The Florida Foreclosure Rescue Fraud Prevention Act
While foreclosure rescue schemes seem innocuous enough, they defraud homeowners who are already in financial trouble out of a tremendous amount of money. For this reason, several states have enacted legislation that prohibits people and companies from taking this type of predatory action, and Florida is no exception. In Florida, homeowners are protected by the Foreclosure Rescue Fraud Prevention Act.
Under this act, anyone that offers services claiming to help save residential properties from foreclosure must operate under tight restrictions. Sadly, of course, there are always bad actors and not everyone abides by the law.
How to Avoid a Foreclosure Rescue Scam
Once you understand the types of foreclosure rescue scams companies and individuals engage in, you can then take certain steps to avoid becoming a victim of one.
The most important steps to take are as follows:
- Do not pay upfront. Modification companies are much more interested in receiving your money than they are helping you, so they will typically charge a high upfront fee. Federal law prohibits this, and it is a red flag if any company asks for one.
- Always pay your servicer. Always make sure any payments you make towards your mortgage go to your servicer or lender. Never pay a modification company with the hope that they will fulfill their promise of transferring it to your servicer.
- Do not ignore your servicer. Modification companies may encourage you to stop all communication with your servicer, but doing so is a mistake. If you are facing foreclosure, you should actually be dealing with your servicer more, not less.
Call Our Foreclosure Defense Lawyers in Broward County First
It is true that you need help when faced with the idea of losing your home, but a modification company will not provide it. At Loan Lawyers, our Broward County foreclosure defense lawyers can provide the sound legal advice you need and help you avoid foreclosure altogether. Call us today at 954-807-1361 or fill out our online form to schedule a free consultation so we can advise on your case.