Rising home loan delinquencies and foreclosures have made con artists very  busy.  These scammers use the public records to find homeowners who are in trouble, and then use a variety of schemes to take the homeowners'  money and property in the name of helping the homeowner avoid foreclosure.   If you have late payments on your home loan then it is likely that you will be targeted. The following are some warning signs that you are dealing with a possible scammer.

Unsolicited contact - If you receive an unsolicited call or letter promising help, verify that the person promising help is actually from your lender or servicer.  Technically only your lender or servicer has the power to modify your loan.  Scammers use the public records to find out the default status of homeowners, and some of them pretend to be the lender holding the lien.  However, you can usually verify if the offer for help is real by contacting your lender's public customer service line.

Pretending to be from the government - We all know that there has been several federally sponsored loan modification and bank  bailout programs.  However, these programs ask homeowners to contact their lenders for help.  If you receive unsolicited contact from someone saying they are affiliated with the government then it is a warning sign it's a scammer trying to sound legitimate.

Great promises - Con artists are usually very good salesmen, and many of them promise that they can get the homeowner out of trouble with certainty.  If it sounds too good to be true it usually is.

High pressure - If the nice promises do not work, some scammers go straight for the vulnerability of those in trouble.  For example, they would ask a person if they really want to live on the streets.  If you feeling pressured or threatened by someone promising to help then it is a sign to walk away.

Advanced fees  - If a company asks you for a few thousand dollars to start  the process, it's most likely a scam.  When a legitimate lender modifies or refinances your loan they add up the costs at closing. Once you hand over the advanced fee there is really no guarantee that the company will do anything. There are legitimate housing counselors that charge fees for their services, but consumers should make sure that they have actually received the services before paying.

Diverted mortgage payments - Some scammers tell a troubled homeowner that they already negotiated a lower mortgage with the lender and that the homeowner should send the lower payment to the scammers instead of the lender. Even though this scheme is fairly easy to verify through the lender, sometimes troubled homeowners do not figure out that the lender is not receiving any money until months later.

Suspicious advice - Scammers often give advice such as "stop talking to your lender" or "you are not obligated to pay your loan."  They want the troubled homeowner to talk to them only.  Make sure to communicate with your actual lender.

Property transfer - Many scammers ask troubled homeowners to sign over the property so that they could make the mortgage payments.  The fact is that the scammers do not have to make mortgage payments on the property, and often times they use the properties to defraud  lenders.

Power of attorney - Some scammers ask troubled homeowners to sign over the power of attorney to another person.  This basically allows them to act on the homeowner's behalf on many legal documents.  Giving away the power of attorney is actually worse than signing away the home.

If you suspect that you are being scammed you should definitely report the details to the FBI or the FTC as well as your local consumer protection agencies.  If you really need help dealing with your lender then there are legitimate housing couselors available at the HUD and their services do not cost thousands of dollars. 

Have you been contacted by a scammer or have you been scammed?  What did you do?