We live in an environment that is ripe for scams.  People are facing a great deal of financial frustration and, in some cases, crisis.  As a result, the scam artists come out of the woodworks with the solution that is going to change everything.

One area in particular just ripe for scams is the real estate markets.  The statistics show a real estate market that is still in crisis.  Consider these followings stats:

• It is estimated that banks are holding onto 2.5 million foreclosed homes that have yet to be released to the real estate markets. At some point, the banks are going to have to face reality and release these houses, which will create further pricing pressures.
• The number of homeowners under water (those who owe more on the mortgage than their house is currently worth) amounted to 28.4 percent of single-family homeowners, representing a peak since Zillow began calculating the data.  Making that data even more disturbing, 32% of homeowners do not even have a mortgage.  Said another way, of the homeowners who have a mortgage, 45% of those homeowners owe more on their homes than they are worth.
• In March, 1 in every 1000 homes in America was in foreclosure.  In April, 1 in every 593 homes received a foreclosure notice.  Although these statistics are getting dramatic, it is really tough to get a good idea as to the degree of severity of the foreclosure crisis.  The process is riddled with problems, which creates a lengthy, ineffective process.   In New York and New Jersey, it takes more than 900 days to get through the foreclosure process from start to finish; in Florida, 619 days; and in California, 330 days, according to RealtyTrac.  The national average is around 400 days to get through the process from start to finish.  There are currently estimated to be 2.5 million homes in bank inventory that have not even hit the real estate markets. 

There are many companies reaching out to those in trouble proposing a solution.  Brandon Ballenger of Money Talks News warns of these signs to watch out for:

Require upfront fees to start work. According to the NFHA report, over half of the 80 companies they examined do this. Most reputable companies don’t.

Guarantee a loan modification. NFHA says 43 percent do this – but how can they make any guarantee without knowing your situation? As Stacy points out in the video, nobody knows in advance what a lender is going to agree to, so anyone guaranteeing results can’t be trusted.

Tell homeowners to walk away. NFHA says a quarter did this. If you can’t afford to pay, defaulting may ultimately be your only option, but it’s not one to be taken lightly.

Guarantee a much lower interest rate. NFHA says 16 percent do this, once again without knowing anything about your lender or situation.

Tell homeowners to lie. NFHA says 8 percent offered this gem: Give the lender fake info! Providing false information for the purposes of a loan is illegal, and advising people to commit a crime is reprehensible.

Discourage homeowners from seeking free advice. NFHA says 12 percent of the companies they examined told owners not to talk to government-approved counselors, which is, of course, exactly what you should be doing.

Source: Money Talks (http://s.tt/12q5l)

Unfortunately, there are really no good answers to this foreclosure crisis we are dealing with right now. If you are seeking help, be careful and know that you will need to take your time finding someone that is not going to just take advantage of your crisis situation.