Beware of real estate scammers

It's a jungle out there. You knew that already, of course. But there seems to be something about our troubled economic times that's bringing out the schemers, the scammers and the less-than-straightforward, many of whom have zeroed in on housing.

With the word "foreclosure" on so many lips, it's probably not surprising that con artists have found ways to prey on others' misery by promising to "fix" loans that have gone bad. But renters need to tread carefully these days, too, according to consumer advocates and law-enforcement representatives.

Five things to keep in mind for renters and homeowners who want to keep other people's hands off their wallets:

1. Scams that promise they can arrange loan modifications for homeowners who are facing foreclosure "are the single largest set of complaints we're receiving right now," said Stephen Robinson, chief of the Economic Crimes Division for the San Diego County District Attorney's Office.

"They make a representation that they can get your loan modified," said Robinson. All you have to do, they promise, is pay them a fee upfront, and they'll take care of the rest. While a few companies may offer genuine assistance, it could be a scam, and the payee may disappear with your money, he said.

The upfront cash requirement is a major red flag, said Steve Bernas, president and chief executive of the Better Business Bureau of Chicago and Northern Illinois. "If somebody wants money ahead of time and they guarantee to help you with your mortgage payments or to amend the loan in any way, you've got to be wary."

Robinson said it's illegal for companies to get paid in advance for such services (with the exception of legal services from one's attorney) in more than 20 states.

Bernas said consumers seeking loan modifications should work with their lenders first before seeking additional help; also, housing counselors certified by the federal Department of Housing and Urban Development will work, without charge, to help homeowners who may be eligible for loan modifications, he said.

2. Foreclosure "rescues" are the first cousins to loan-modification frauds, Robinson said.

"The pitch is, we can stop the foreclosure process by filing for a 'federal land grant' for your property," Robinson said. ...CONTINUED

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