Distressed homeowners trying to save their properties from being placed on a foreclosed home list is faced again with yet another obstacle in achieving financial recovery and security. Unscrupulous people and companies offering bogus foreclosure prevention services are growing in numbers every day.
To help troubled homeowners, the U.S. Internal Revenue Service (IRS) has issued guidelines on how to avoid fraudulent foreclosure prevention services while they are working to save their houses from foreclosure and restore their credit status.
In its guidelines, the IRS emphasized the importance for troubled homeowners to work only with housing counselors approved by the Department of Housing and Urban Development (HUD). The agency has a searchable online list of counseling agencies it approved to help homeowners find ways to prevent foreclosures.
The IRS reminded distressed homeowners that housing counselors certified by the HUD offer their services at no cost and do not ask for upfront fees. The agency reiterated that troubled homeowners should avoid dealing with housing counselors who collect fees before providing foreclosure prevention services or who ask for payments in wire transfer and cashier’s check.
In hindsight, any homeowner should not pay cash to anyone unless he knows what services he will be going to receive.
Furthermore, a legitimate housing counselor would not make any guarantee or promise that he would prevent a property from falling into a foreclosed home list. The reality is, certified housing counselors are there to increase the chances of a homeowner to remain in his home.
The IRS also reminded homeowners not to allow anyone to pressure them into signing paperwork without reading and understanding the fine print. The agency suggested for troubled homeowners to consult a lawyer before signing anything that will entail transferring the titles of their properties to another party.
The agency also advises homeowners to follow their instincts. If they feel that they are being targeted for a foreclosure fraud, homeowners should seek help immediately, the IRS said.
With the alarming rate of foreclosures in the country, some government agencies are intensifying their efforts to inform distressed homeowners of their rights and how to avoid fraudulent foreclosed home list prevention schemes. The Federal Trade Commission has a section on its Web site devoted to fraudulent foreclosure rescue services.
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