The recession has hit families hard, and many Americans are willing to try just about anything to escape from burdensome loan payments, including their mortgage. But, some companies offering a way out are scammers in disguise, whose “services” often leave already-struggling individuals in a far worse predicament.
Avoid Foreclosure Rescue Companies
They go by many names, such as loan modification companies, foreclosure rescue services, or mortgage relief providers. But, one thing these services generally all have in common is promises that never seem to materialize.
Some foreclosure rescue companies are completely fraudulent; others may delay foreclosure for a brief amount of time, but fail to ultimately save your home despite, walking away with a hefty fee from you. These companies will typically charge you an excessive fee to file an answer on your behalf to the foreclosure summons, which will stall the foreclosure lawsuit temporarily. However, the foreclosure proceedings will eventually be reinstated, and before you know it, your house is up for auction at a sheriff’s sale.
A typical mortgage relief scam has several stages. First, homeowners are seduced by advertisements promising that a mortgage relief company can get banks to lower monthly mortgage payments. After collecting a fee, the company will advise the homeowner to stop making mortgage payments while they negotiate with the bank. Generally, these negotiations never result in lowered mortgage payments, and the homeowner is often left months behind on their payments, and often in facing an imminent foreclosure sale.
Mortgage relief companies have no legal authority to stop foreclosure proceedings, and once the homeowner gets behind on payments, late fees can quickly stack up, or the bank may act to seize the property. In the end, when loan modifications fail, as they usually do, disreputable mortgage relief services walk away with their fee and homeowners are left even further behind, facing a scheduled sheriff’s sale, or out of their home completely.
The Real Solution to Saving Your Home
The best way to avoid being scammed is to simply ignore solicitations from mortgage relief agencies and foreclosure rescue companies; if it sounds too good to be true, it probably is.
Getting in touch with an experienced bankruptcy attorney is the most productive avenue for exploring your real, legitimate options to deal with oppressive debt, including high mortgage payments. Filing for bankruptcy legally stops all collection activities, including foreclosure, and can also allow you to save your home.
Chapter 13 bankruptcy legally stops foreclosure proceedings and prevents all creditors from pursuing collection efforts against you. A Chapter 13 allows you to get caught up on missed mortgage payments (arrears) over the course of three to five years, while eliminating some, if not all of your unsecured debt. In a Chapter 13, you can often completely wipe out a second mortgage or judgment liens on your property. The Chapter 13 plan is regulated through the Federal Bankruptcy Laws, and provides you legal protection from your creditors while allowing you to keep your home and vehicles. Many instances, you can lower your vehicle loan payments through a Chapter 13. When you have completed the Chapter 13 payment plan, your remaining debts are discharged, meaning they are totally eliminated, and your mortgage will be deemed current.
Remember, if you are struggling to make your monthly mortgage payments or have already fallen behind, do not get scammed by the so-called mortgage relief, loan modification and foreclosure solutions companies that may solicit you. Instead, know your legal rights by contacting an experienced bankruptcy attorney. Bankruptcy can legally save your house, vehicles and give you the protection you need from your overwhelming debt.