phantom foreclosure scam

Foreclosure Scam: Watch Out for Phantom Help

In the phantom help foreclosure scam, con artists promise you assistance, but they’re just helping themselves to your money.

Phantom helpers may target a neighborhood with a direct-mail campaign promising help for those facing foreclosure--but don't get taken in by a scam. Image: Tetra Images/Getty Images

Few things are scarier than the prospect of losing your home to foreclosure. Scam artists know that and will test your vulnerability by offering “phantom help” as part of a foreclosure scam. Knowing the difference between legitimate help and a foreclosure scam can prevent you from losing your home.

How do they hook you?

Phantom helpers may blanket a hard-hit town or neighborhood with a direct mail campaign promising relief for those threatened by foreclosure. When you’re feeling desperate—and when panic sets in—good judgment goes out the door.

What do phantom scammers do to you?

Of course, just because they seek you out when you’re feeling vulnerable doesn’t mean you have to yield. A cool head and education are your best protection when foreclosure scam artists show up with reassuring words. They’ll start by telling you they can negotiate a deal with your lender—but they have no intention of doing so.  

Instead, phantom help scammers may:

  • Isolate you, telling you not to contact your lender, lawyer, or a credit counselor.
  • Demand upfront fees.
  • Tell you to make all the mortgage payments to them instead of your mortgage firm—before they disappear.
  • Trick you into signing over the deed to your house and, when it’s too late to save the home, sell it for whatever they can get.
  • Use the government’s name to dupe you into making payments to them, by using official-sounding acronyms like “TARP” or official-looking website addresses.
  • Try to charge you for access to free government assistance.
  • Extract enough personal information to commit identity theft.

Educate yourself to protect yourself

Tip off: You never need to pay to find out about legitimate government programs. A housing counselor approved by the U.S. Department of Housing and Urban Development can point you in the right direction—for free.

Other options:

  • Stay away from any firms that guarantee to stop your foreclosure, claim to have special relationships with banks, or offer money-back guarantees.
  • Watch out for unsolicited offers to refinance, especially from companies claiming government affiliations—these may well be foreclosure scam artists.