O.K., so there are thousands of scammers out there. I’ve always maintained that it’s pretty easy to spot them. However, even a number of my own relatives have fallen prey to scammers. So here are some tips to avoid the sharks.

Here are some examples of scams related to mortgage modification and foreclosure avoidance.

• Foreclosure rescue and refinance fraud. The scammer offers to act as an intermediary between you and your lender to negotiate a repayment plan or loan modification and may even “guarantee” to save your home from foreclosure. This, in itself is not illegal or unethical…or even a bad idea…BUT, if you are told to make mortgage payments to the scammer directly — or to pay significant, up-front fees — and trust that that the scammer will forward the payments to your lender – run! In reality, the scammer will pocket your money and leave you in worse shape on your loan. The scammer also may tell you to stop making payments or stop communicating with your lender. Make those decisions for yourself.
  

  Your mortgage servicer can be a good starting point for information about programs available to you…but, do not mistake them for an ally. You will eventually be dealing with them “across the table”, in negotiations…to workout a solution best for you. Do not fall for their siren song of benevolence. They are your adversary and they hold all the cards…you can deal with them effectively, but do not be naïve.
  

• Fake government modification programs. Unscrupulous scammers may pose as being affiliated with, or approved by, the government or may ask you to pay high up-front fees to qualify for government mortgage modification programs. While government-supported mortgage modification and refinancing initiatives are legitimate, the scammers’ claims are not. Keep in mind that you do not have to pay to benefit from these government programs.
  

  The scammer’s name or Web site may be very similar to those of government agencies. The scammer may use such terms as “federal,” “TARP,” or other words or acronyms related to official U.S. government programs. These tactics are designed to fool you into thinking the scammer is somehow approved by, or affiliated with, the government.
  

• Leaseback/rent-to-buy schemes – run if you are asked to transfer the title to your home to the scammer, who will, supposedly, obtain new and better financing and/or allow you to remain in the home as a renter and eventually buy it back. If you do not comply with the terms of the rent-to-buy agreement, you will lose your money and face eviction. The agreement may be very hard to comply with, because it may require, for instance, high up-front and monthly payments that you may not be able to afford. In fact, the scammers may have no intention of ever selling the home back to you. They simply want your home and your money.
  

  Remember that transferring your title does not change your payment obligations — you will still owe your mortgage debt. The difference will be that you will no longer own your home. If payments are not made on the mortgage, your lender has the right to foreclose, and the foreclosure and any other problems will appear on your credit report.
  

• Bankruptcy scams. You may have heard that filing bankruptcy will stop a foreclosure. This is true — but only temporarily. Filing bankruptcy brings an “automatic stay” into effect that stops any collection and foreclosure while the bankruptcy court administers the case. Eventually, you must start paying your mortgage lender, or the lender will be able to foreclose. Bankruptcy is rarely, if ever, a permanent solution to prevent foreclosure. In addition, bankruptcy will negatively impact your credit score and will remain on your credit report for 10 years.
  
• Debt-elimination schemes. Scammers may claim to be able to “eliminate” your debt by making illegitimate legal arguments that you are not obligated to pay back your mortgage. These scammers will provide you with inaccurate claims about applicable laws and finance, such as that “secret laws” can be used to eliminate debt or that banks do not have the authority to lend money. Do not stop making payments on your mortgage based on their claims.
  

Always proceed with caution when dealing with anyone offering to help you modify your mortgage or avoid foreclosure.

• Make all mortgage payments directly to your lender or to the mortgage servicer. Don’t trust anyone to make mortgage payments for you, and do not stop making your payments.
  
• Avoid paying up-front fees. While some legitimate housing counselors will charge small fees for their services, do not pay fees to anyone before receiving any services. Make sure you are dealing with a legitimate organization.
  
• Know what you are signing. Read and understand every document you sign. Do not rely on an oral explanation of a document you are signing — make sure that you read and understand what the document actually says.
  
• Do not sign over your deed without consulting a lawyer you select. By signing over your deed, you lose the rights to your home and any equity built up in the home — and you are still obligated to pay the mortgage.
  
• Get promises in writing. Oral promises and agreements relating to your home are usually not legally binding. Protect your rights with a written document or contract signed by the person making the promise. Keep copies of all contracts that you sign.