a consumer needs to protect him self from a foreclosure scam

Foreclosure Rescue Scams

Thieves prey on those facing a foreclosure. Here are tips on avoiding common scams.

Foreclosure Rescue Scams


Foreclosures are public record in the State of California. “Scammers” will contact you and claim that they can help you but most often they will just rip you off. They are opportunistic individuals who prey on homeowners in need.

How do “Scammers” contact homeowners?

  • A person who calls himself an investor stops at your door and convinces you to sell your property to him and take over your mortgage payments.
  • Advertisements on TV, radio, ethnic media or billboards that offer to get you a loan modification or even a new loan without checking your credit report or financial condition.
  • A large number of phony counseling agencies, that either meet you at your residence or email you, to offer their services for an outrageous fee.
  • Predatory lenders convince you to apply for low-interest mortgage loan over the Internet, extracting your Social Security numbers and bank accounts.
  • Letters that you received from fake government agencies using real government logos convincing you to pay them for assistance.

Beware of these common scams:

The ‘Scammers’ will say: “Ignore the notices. Just pay me and I’ll negotiate with your lender.”

What really happens: They take your money, but do not call your lender. Or they will have you work with their “in-house” lawyer, who’s in on the scam. Then your house gets foreclosed and you’re out of luck.

DCBA’s tip: Never ignore notices. Talk to your lender directly and call DCBA for free help.

“Give me money to file a bankruptcy. That stops the foreclosure.”

What really happens: A bankruptcy can delay the foreclosure but it will not stop it. They will take your money but will not file anything. If they do file a case, they will not follow up and you will lose your home.

DCBA’s tip: If you are thinking of bankruptcy, contact a legitimate attorney.

“You need a forensic loan audit. That will get you a loan modification and stop a foreclosure.”

What really happens: There is no guarantee that a forensic loan audit, even if done by a legitimate, licensed professional or lawyer, will help you get a loan modification or stop a foreclosure. You will lose even more money and still lose your house.

DCBA’s tip: Do not pay anyone upfront fees for foreclosure help. Call DCBA for free help.

“Deed the house to me and pay me rent. I’ll pay the mortgage, and sell it back to you.”

What really happens: The papers you sign transfer ownership of your house to them. They sell the house without your knowledge or take out loans. They don’t pay your mortgage. Your house gets foreclosed. You get evicted.

DCBA’s tip: Do not sign anything you do not understand and do not transfer ownership of your house to anyone. It’s a bad idea and you’ll end up losing your home.

Red Flags

If you need help preventing a foreclosure, avoid any business that:

  • Contacts you by phone, mail or door-to-door.
  • Guarantees to stop the foreclosure or promises it will be quick and easy.
  • Tells you not to contact your lender, lawyer, or credit or housing counselor.
  • Encourages you to lease your home so you can buy it back later.
  • Tells you to make your mortgage payments directly to them instead of your lender.
  • Claims to be honest because he is the same religion, race or ethnicity as you.
  • Offers “testimonials” from other customers.
  • Asks you to transfer your property deed or title to them.
  • Pressures you to sign paperwork you haven’t read or that you do not understand.

How can you avoid foreclosure rescue scams?

  • Homeowners should contact their lenders first
  • DO NOT pay for foreclosure prevention services
  • Seek Assistance from Department of Consumer and Business Affairs and other trustworthy Housing and Urban Development (HUD) agencies
  • Never feel pressured to sign a document
  • Check with the Department of Real Estate to see if the mailings are from legitimate companies
  • Check for “red flags” on mailings from ‘government’ agencies

Who can you call for free and reliable help?

Our experienced staff can discuss your foreclosure with you and help you explore all your options to save your home. We can help you work with your lender, to identify your options.

If you are a resident of the County of Los Angeles, you may apply to the County of Los Angeles Mortgage Relief Program.

If you are a resident of California, you may apply to the California Mortgage Relief Program.

Where to report foreclosure rescue scams?

Victims can file a complaint to any or all of the following organizations:

Department of Consumer and Business Affairs (DCBA)

  • Submit a complaint regarding fraud or misrepresentation of information.

Federal Trade Commission

  • Report a scam, a company, or an unwanted call.

California Department of Real Estate

  • Submit complaints against real estate brokers and salespersons accused of misleading or defrauding consumers.

What happens if I lose my home?

Call 211, L.A. County’s information hotline, for low-cost housing and shelters, mental health services and food assistance. Call your local housing authority for information on Section 8 or low-income housing.

Watch out for scams!

Many people and businesses will promise to help save your home. Most will just take your money, do nothing and you’ll lose your home. Don’t become a victim of a foreclosure rescue scam. If you have been scammed call us right away to file a complaint. All our services are free!

If you have any questions, please contact us through one of the methods listed below:

County of Los Angeles Department of Consumer and Business Affairs. Last change: May 6, 2022

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