Foreclosure Guide

Are you among the more than one million Americans who might lose your home to foreclosure? It's a difficult situation for any family or individual who owns a home. Unfortunately, it's also one that's opened so many people to the dangers of getting ripped.

In most states, there are public records of who is falling behind on a mortgage. That's created an opportunity for swindlers who show up at your doorstep with a "personalized foreclosure rescue package" for you. Or worse still, we've all seen the signs on the side of the road that blare "Stop foreclosure! Call now!"

The punch-line in both cases is that you have to pay money upfront. The average amount that swindlers who promise to stop foreclosure steal from people is around $3,000, according to a recent New York Times report.

Remember these simple rules of thumb to protect yourself:

• Never pay a fee in exchange for a counseling service or modification of a delinquent loan.
• Never sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
• Never make a mortgage payment to anyone other than your mortgage company without their approval. The bubble states of California, Arizona, Nevada and Florida have been hit the hardest by foreclosure rescue scams. Last year, The Orlando Sentinel reported there were 40 outfits being investigated in Florida alone for violation of anti-fraud laws.

Thankfully, there is legislation to protect unsuspecting homeowners. Under the Foreclosure Rescue Fraud Prevention Act, scammers can be fined $10,000 per incident ($15,000 if it involves a senior citizen).

But the best prevention is to not get taken in the first place. There are a variety of organizations that can provide free counseling assistance if you're facing foreclosure.

One legitimate way to seek help to stop foreclosure is through the Making Home Affordable Modification Program. You'll need to have a loan that is owned by one of the two giant mortgage clearinghouses in our country -- Fannie Mae or Freddie Mac. Contact Fannie at 1-800-7-FANNIE and Freddie at 1-800-FREDDIE from 8 a.m. to 8 p.m. ET to find out if they own your loan. Lenders will write down the interest on loans for those homeowners who do qualify. Visit MakingHomeAffordable.gov for more information or call 1-888-995-HOPE.

Don't expect an immediate answer. This can be a very long process because of the sheer number of modification applicants. See the usual methods of stopping foreclosure. Remember, being politely persistent is the key to making it through the process successfully!