Quiz: Avoiding Foreclosure Fraud

Quiz: Avoiding Foreclosure Fraud
Image: iStockphoto.com/tntemerson

About This Quiz

If you're faced with the possibility of a foreclosure, the last thing you want to worry about is fraud derailing the process. How much do you know about foreclosure fraud and how to avoid it? Take this quiz to find out!
If you miss a mortgage payment, how should you respond to the lender?
Don't say anything; they might not notice.
Contact an attorney to represent you to the lender.
Contact the lender, let them know about your situation and try to find a solution that allows you to catch up on payments.
Foreclosure is expensive and time consuming for lenders as well as homeowners, so most are willing to work with you to make the mortgage whole after one or two missed payments.

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If you're searching for an attorney to represent you in a foreclosure, how can you check his or her credentials?
Ask your friends if they know a good lawyer.
Check prospective attorneys with state and local bar association records.
While word-of-mouth can point you toward a good attorney, friends may not know your exact needs. State and local bar associations are the best resources for finding out if an attorney practices law in an ethical manner.
Only use a lawyer who's part of a large firm; small law offices are prone to fraud.

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How can you verify the credentials of a non-legal foreclosure service provider?
Ask for a contract and copies of all documents related to the provider's work on your case.
When in doubt about a service provider, look for a paper trail. Legitimate providers should readily provide contracts, terms of service and documentation to prove they're aboveboard. Hesitation here should be a warning flag that you're at risk for fraud.
Non-attorneys shouldn't be involved in any part of the foreclosure process.
Service providers should always be allied with a bank or financial institution.

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What's a surefire way to identify a foreclosure scam artist?
Any party who gives you a deadline is pushing a scam.
Scam artists can come from any size business and present themselves in whatever manner might best win your trust.
Foreclosure scams are complex; likewise, the criminals behind them come in all shapes and sizes. Always take steps to verify a business's credentials before working with it to resolve a foreclosure.
Never trust a service provider who doesn't work in a legitimate law office.

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What's the first thing you should do if you're approached by a foreclosure assistance company?
Check its name with the local bar association.
Ask your bank if they've heard of the company.
Find out how the company got your name and information.
If a foreclosure service provider is legitimate, it's likely it has enough business without aggressively seeking out new clients. Find out how the business got your name, and be wary that it may be offering a scam.

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How do you identify who holds your mortgage?
Check your records to see who first held it when you bought the home.
The bank that contacted you about the missed payment is the one who holds the mortgage.
Mortgages are bought and sold; it may be best to have an attorney identify who holds your mortgage.
Mortgages are bought, sold and exchanged among financial institutions. If you're facing foreclosure, it's important to find out who holds the right to foreclose on your mortgage. This may be a job for a qualified attorney.

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If a "foreclosure rescue agency" guarantees it can save your home, how should you verify the claim?
In general, this kind of claim is unfounded and should be viewed with great suspicion.
The success of a foreclosure resolution ultimately depends on your ability to work out a payment plan with your lender. A guarantee from a mortgage rescue operation should be seen as a warning flag of a possible scam.
Ask the agency to provide references from satisfied customers.
Check with your local bar association to verify the agency's track record.

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What's the best way to avoid foreclosure fraud?
Do everything you can to avoid foreclosure in the first place.
While it may seem obvious, the best way to avoid fraud -- and a lot of stress and financial drain -- is to do everything you can to avoid ever entering foreclosure.
Hire a good lawyer.
Don't talk to anyone but your own bank.

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You Got:
/8
iStockphoto.com/tntemerson

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