The other night, it was my turn to cook dinner so naturally I did a Google search for dinner recipes. After all, dads like me need a little help to bring the gang to the table and ensure that they’ll stay there! Sometimes when it comes to loan modifications, most folks will take the word of the foreclosure helper — not realizing that there are as many varieties of scams as quick pasta dinner recipes on the Internet! Today we’ll discuss just three loose loan modification scam categorizes:

Spirit Helper:

The scam artist pledges to the homeowner that for a fee, he will be able to cut the owners payments by a third. Then after taking the owners money, the scammer vanishes like a waiter in an expensive restaurant – never to be seen or heard from again.

The Rescuer Technique:

The homeowner is saved from his dilemma by the generous helper who offers to bail him out. Often the helper needs to take title to the property in order to modify the loan, and promises to lease the property back to the homeowner. Then when the owner is able to purchase, he will be able to purchase the property back again. Sounds good, right? Usually the scammer ends up not honoring the agreement, and simply kicks out the owner. Or the helper rents out the property until it is foreclosed upon and keeps all the rent receipts for himself.

Bait-and-Switch:

In this scenario, the homeowner is usually persuaded to do one thing but ends up doing another – like signing a deed and giving up his interest to the property. For example, the scammer might tell the homeowner that he needs to sign a power of attorney to negotiate with the lender to do a loan modification. Then after signing it, the helper uses the power of attorney to evict the owner from the property and rent it out.

In addition to the above categories, there are many other types of foreclosure-related scams, including forgeries, theft, identity theft, property flipping scams, loan fraud, predatory lending practices, pyramid schemes, ponzi schemes, bankruptcy fraud, landlord-tenant fraud, short sale consulting fraud, and bank-owned property or REO fraud.

Therefore, if a helper asks for money upfront before providing any service ” beware. If he asks for payment only in the form of cash, cashiers check, or wire transfer”beware. If he asks for a transfer of title or an interest in the property”beware. If he gives an unqualified promise to stop foreclosure or other assurances “beware. If he offers to buy a home for a price above its market value–beware.

Just as one would be wary of eating raw fish as a restaurant with a quality rating of D ” when it comes to foreclosures, short sales and loan modifications, you should be extra cautious with people offering their services to help you too!