Even though most mortgage companies and financial advisors are upright, there are others trying to make money off the misfortunes of homeowners. Even those that may find themselves in the midst of a foreclosure. Some second mortgage issuers will try to increase the homeowner's risk by loaning more than the homeowner can afford to repay and charging excessive rates of interest, points and fees to increase their profits. Or they might offer to continuously refinance the loan to put the homeowner deeper in debt. When a homeowner can't make the payments, they may be agreeable to anything that gets them out of their short-term problem.

"equity skimming" is a process where a buyer offers to help the homeowner out of their situation by paying off the mortgage or telling the homeowner they will get money when the buyer sells the property. All the homeowner has to do is move out and sign over the deed to the buyer. The buyer then rents the property, collects rent, but does not make mortgage payments. The buyer keeps the rent money and the property moves into foreclosure by the bank. However, the original homeowner is still responsible for the original mortgage amount. Signing over the deed does not mean you are no longer responsible for the loan terms you have signed with the lender. It just means you don't own the home, but you still own the mortgage payments.

One more scam that is sometimes played is the use of "counseling agencies" to gain your confidence. Someone may contact the homeowner from one of these pretend companies and offer to provide some services to help the homeowner for a certain fee. Unfortunately, these services may not be necessary or may be services that the homeowner can do for free. Homeowners should check references on any agencies they work with. Chances are they are after your money and not in the business of helping anyone, but themselves.

If you believe that someone might be taking advantage of your situation, then you must make sure you don't sign any documents until you have relieved all doubts concerning the deal. Read all documents, make sure all promises are in writing, and make sure your liability is released if you transfer title. Have an attorney review all documents to make sure they accomplish what you wish. Check out the buyer's references to make sure they do not have past problems.

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