This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Scams Making Suckers Out of Homeowners

BOSTON ( MainStreet) -- Today's bad economy and worse housing market are combining to create a field day for scam artists, who find easy pickings among homeowners desperate to avoid foreclosure or just save a few bucks.

"Any time that the economy is bad, scammers come out of the woodwork," says Katherine Hutt of the Better Business Bureau, which logs some 1.2 million complaints a year about scams and bad company practices in general.

Scam artists seem to especially target senior citizens.

"Many of the elderly were raised in a different time, when people were more honest than they are today," says Polyana da Costa of consumer-financial Web site "You also didn't have the Internet, which is where many of these scams originate. You go online looking for a better mortgage rate or some sort of foreclosure rescue and you end up in the wrong hands."

Here's a look at common housing-related scams that da Costa and other experts warn consumers should avoid:

Loan-modification scams
This scam targets people facing foreclosure, with fraudsters promising to negotiate a loan modification for them in exchange for big upfront fees.

Lenders do approve such modifications these days, but the U.S. Department of Housing and Urban Development prohibits legitimate foreclosure-prevention counselors from charging advance fees to help you negotiate one.

"If I can get one message across to borrowers, it's: 'Do not pay any upfront fees,'" da Costa says. "I've heard of so many people who've paid $5,000 to get a loan modification but who basically got nothing -- and didn't find out until months later when they lost their homes."

Don't be fooled by loan modification specialists who advertise their services, have big offices or operate Web sites with official-sounding names based on real government foreclosure-prevention programs.

"Scammers don't look like scammers, they look professional," da Costa says. "That's how they fool you."
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $117.81 0.00%
FB $105.45 0.00%
GOOG $750.26 0.00%
TSLA $231.61 0.00%
YHOO $32.94 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs