Every disaster brings out the best and the worst in people.

After any disaster there are those who look for opportunities to take advantage of the vulnerable. Foreclosure is a financial disaster that similarly brings out predators looking for opportunities.

Before I discuss predators, I need to emphasize that there are many decent, honest and legitimate investors who make their living by purchasing homes that are about to be foreclosed. These investors are truly “white knights” who can rescue you from foreclosure by paying off your mortgage note. The key is to learn how to distinguish the true investor from the person trying to rip you off. Read the sections on

• How Foreclosure Con-Artists Operate
• Phony Foreclosure Counseling Agencies
• Equity Skimming

These section will give you an idea these how scammers work.

It’s important that you do some research about any investor who approaches you offering to purchase your home. Some obvious sources of information: Real Estate Agents and a name search on the Internet.

Scammers are able to succeed primarily because homeowners' lack adequate knowledge about foreclosure. Without honest guidance regarding the process and their legal rights and alternatives, the homeowner can be taken in by the predator who promises to rescue them from foreclosure.

One common trick of any predator is to cut off a victim’s access to legitimate information. For example, with elder abuse the predator will keep the elderly victim away from lawyers and family members.

Scammers encourage you to stay away from people who can give you sensible advice.

Foreclosure scammers, by warning homeowners not to talk to their lender or an attorney cut them off from possible solutions and keep the scam alive.

The predator can approach the homeowner from many directions. The approach can be a straightforward phone call or a knock on the door. A brochure or flyer may be left at the front door or placed in the mailbox. Often a predator will advertise in the classified section of the newspaper. A Google search turned up numerous websites offering to assist home-owners. Often the predator will put signs up in neighborhoods stating “We Buy Houses.”

The New York State Banking Department has information on how to avoid foreclosure and related scams.

Foreclosure scammers are becoming an increasing nightmare for homeowners. California Attorney General Edmund G. Brown Jr. is vigorously pursuing foreclosure scammers and offers these tips for homeowners to avoid becoming a victim:

• DON'T pay money to people who promise to work with your lender to modify your loan. It is unlawful for foreclosure consultants to collect money before (1) they give you a written contract describing the services they promise to provide and (2) they actually perform all the services described in the contract, such as negotiating new monthly payments or a new mortgage loan. However, an advance fee may be charged by an attorney, or by a real estate broker who has submitted the advance fee agreement to the Department of Real Estate, for review.
• DO call your lender yourself. Your lender wants to hear from you, and will likely be much more willing to work directly with you than with a foreclosure consultant.
  
• DON'T ignore letters from your lender. Consider contacting your lender yourself, many lenders are willing to work with homeowners who are behind on their payments.
  
• DON'T transfer title or sell your house to a "foreclosure rescuer." Fraudulent foreclosure consultants often promise that if homeowners transfer title, they may stayin the home as renters and buy their home back later. The foreclosure consultants claim that transfer is necessary so that someone with a better credit rating can obtain a new loan to prevent foreclosure. BEWARE! This is a common scheme so-called "rescuers" use to evict homeowners and steal all or most of the home's equity.
• DON'T pay your mortgage payments to someone other than your lender or loan servicer, even if he or she promises to pass the payment on. Fraudulent foreclosure consultants often keep the money for themselves. DON'T sign any documents without reading them first. Many homeowners think that they are signing documents for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership to the "rescuer."
• DO contact housing counselors approved by the U.S. Department of Housing and Urban Development (HUD), who may be able to help you for free. For a referral to a housing counselor near you, contact HUD at 1-800-569-4287 (TTY: 1-800-877-8339) or www.hud.gov. If you believe you have been the victim of a mortgage-relief scam in California, please contact the Attorney General's Public Inquiry Unit at http://ag.ca.gov/consumers/general.php
• Do read my articles on Foreclosure Scams.