Outfits have sprung up all over offering desparate homeowners a way out -- making promises like the following, which were copied from one firm's Web site:

Featured Home Equity Loan Provider
  • If you qualify for the new HARP refinance program, you could get a low, 30 year fixed mortgage rate
  • Short qualification form, then speak directly with a loan officer to see if you can get qualified now!

Your lender WILL NOT be able to call you in attempt to collect!
Your lender WILL NOT be able to collect any deficiency or loss they may receive by you walking away!
You WILL be able to stay in your home for up to 8 months or more without having to pay anything to your lender!
You CAN have the foreclosure REMOVED from your credit!

The catch for these extravagant claims is, "IF you qualify...." Qualifying to be able to avoid deficiency, for example, means living in one of the only 2 states in the country in which it is illegal to collect deficiency judgments -- or having no money, in which case the last thing you want to do is give $1,000 to a company who does nothing you can't do yourself for free. Time Magazine ran a story in June which stated that by and large these outfits, which charge cash-strapped homeowners about $1,000, perform services that homeowners can get for free elsewhere--and the worst ones may do nothing but "handholding" after taking your money.

And removing the foreclosure from your credit? If it sounds too good to be true....remember all those scams a few years ago involving companies promising to make bad credit histories "disappear?" Too good to be true, but a lot of people lost money, and some even found themselves in hot water for committing fraud.

So ignore the extravagant claims and avoid these sleazy companies. Your best (and cheapest) sources of help don't cost a thousand dollars. Time suggests you first contact your lender, write a letter documenting your circumstances and asking for help, and turn to non-profit housing counselors for assistance if you need it. And if you are solicited by these companies? Remember the "weasel words" typically found in advertisements for questionable products. "Actually results will vary," "Results not typical," or in this case, "If you qualify...."