Don't Let Bad Credit Lead to Mortgage and Debt Consolidation Scams
By Francine L. HuffMortgage Credit Problems Columnist
Having bad credit can
make people feel desperate for a way out of their financial problems. As a
result they can become vulnerable to mortgage or debt consolidation scams. Here
are some things to watch out for to avoid becoming a victim.
The Knock at the Door
The number of foreclosure filings in the
Whether the person says they're an investor, real estate
agent, or foreclosure consultant, it's important for people to avoid signing
any paperwork on the spot. Even if an offer seems to be the answer to a
homeowner's bad credit problems, they should avoid making any deals until
they've had time to check out the person's company and reputation.
Review All Contracts
Signing paperwork without reviewing it has resulted in
instances where people unknowingly signed a quitclaim deed, which basically
means they signed over ownership of their home. Once that happens, a homeowner
can be evicted and the house can be sold out from under him.
Debt Consolidation
Scams
Using a debt consolidation service to repair bad credit is a
legitimate option for some homeowners. However, it's important to check out a debt
consolidation company before signing up to determine if it's on the up and up.
If a company guarantees it can reduce debt payments or interest by 50%, look
closely at their paperwork -- and look for another firm if necessary. Debt
consolidation services can help negotiate with creditors but ultimately have no
control over how much a creditor will accept.
Another scam to watch out for is a debt consolidation
company or foreclosure consultant requiring an upfront fee to enroll in it --
then never helps the homeowners set up a plan to repair bad credit and even
stops taking their phone calls.
People with bad credit need to use common sense when looking
for ways to pay down their debts. Anyone who makes promises that seem fishy or
too good to be true should be avoided like the plague.
Sources
Realty
Trac
Smart
Credit
About the Author
Francine L. Huff is a
freelance journalist and the author of The
25-Day Money Makeover for Women. She
has appeared on a variety of TV and radio shows.
About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.
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