Foreclosure can be overwhelming, and unfortunately, it attracts scammers who prey on distressed homeowners. These bad actors promise quick fixes, mortgage relief, or special insider programs—but their real goal is often to steal your money, your personal information, equity or even your home.
The Federal Trade Commission (FTC), Fannie Mae, and HUD continue to warn homeowners that legitimate foreclosure relief never requires upfront fees. If someone promises you guaranteed results, be skeptical.
How Foreclosure Scams Work
Scammers often use official-sounding language, government logos, or fake credentials to gain trust. They may contact you via phone, mail, online ads, or even door-to-door. Many scams follow a few familiar patterns:
- Phony loan modification services that charge upfront fees and never deliver.
- Title transfer or “rent-to-own” traps that ask you to sign over your deed.
- Fake government programs that use terms like “HARP,” “Biden relief,” or “federal forgiveness.”
- Document rescue scams that claim to remove missed payments from your credit report for a fee.
Warning Signs of a Foreclosure Scam
Avoid anyone who:
- Charges upfront fees to help with a loan modification, short sale, or refinance.
- Promises to stop a foreclosure or guarantee a loan modification.
- Instructs you to stop paying your lender and instead pay them.
- Urges you to sign paperwork quickly, especially if you don’t understand it.
- Asks you to sign over your property deed or other ownership documents.
- Claims to be working with a government program or HUD when they are not listed as approved.
- Asks for personal or financial information, especially via cold calls, texts, or unfamiliar websites.
What to Do Instead
Help is available—and it’s free. You can get real assistance from HUD-approved housing counselors who can walk you through your options, including:
- Loan modifications
- Forbearance agreements
- Short sales
- Mediation with your lender
A counselor can also help determine if you qualify for new programs such as:
- Homeowner Assistance Fund (HAF)
- FHA COVID-19 Recovery Options
- State and local mortgage relief programs
How to Report a Scam
If you think you or someone you know is being targeted by a foreclosure scam, report it immediately:
- File a complaint online at www.preventloanscams.org
- Call the HOPE™ Hotline at 1-888-995-HOPE (4673), available 24/7
- Report fraud to the Federal Trade Commission at reportfraud.ftc.gov
- Contact your state Attorney General’s office
Final Thoughts
At Rocky Mountain Short Sales, we only assist homeowners before foreclosure occurs through short sale negotiations and lender coordination. We do not provide foreclosure defense, loan modification services, or post-sale claims. If you’re at risk of foreclosure, act quickly and avoid anyone demanding payment or making guarantees.
Don’t go it alone. Get trusted help from legitimate real estate brokers, housing counselors or attorneys and avoid becoming a victim twice—once from foreclosure, and again from fraud.
Stay informed. Stay protected.