“Give Me $5,000 and I’ll Stop the Foreclosure”: When Help Is Actually a Scam

This is the article I wish every distressed homeowner could read before answering a foreclosure solicitation.

I once met with a homeowner who had been approached by someone promising to stop their foreclosure.

The proposition sounded simple.

Give me $5,000 and I can make the foreclosure stop.

The homeowner wired the money.

Then the man disappeared.

No meaningful assistance.

No solution.

The foreclosure kept moving.

It Wasn't Just $5,000

That's what has always stayed with me.

Yes, $5,000 was gone.

But that money could have been used in so many ways to help that homeowner transition.

And there was another loss that was arguably even more valuable.

Time.

When a property is moving toward foreclosure, losing weeks while believing someone else is solving the problem can materially change the options available.

Scammers don't just steal money.

They steal options.

By the time I became involved, we needed to move strategically.

Ultimately, I was able to bring in a reputable investor who could provide what I call a "white knight" solution.

The homeowner received cash for keys, additional time in the property to transition and an opportunity to avoid completing the foreclosure process.

It wasn't a magical ending.

It was the best remaining solution we could create with the time and circumstances we had.

And that's important.

Ethical real estate guidance shouldn't promise miracles.

It should explain options.

California Homeowners Have Specific Warnings to Watch For

Be extremely cautious when someone offering foreclosure assistance:

• Demands money upfront
• Guarantees they can stop the foreclosure
• Tells you to stop communicating with your servicer
• Tells you to stop making your mortgage payment
• Asks you to pay someone other than your lender or servicer
• Wants you to transfer title
• Pressures you to sign documents you don't understand
• Uses government-looking language or branding that you can't verify

Another Homeowner Taught Me Something Different

I once met with another homeowner who believed foreclosure was inevitable because someone had told them it was.

When we reviewed the situation, we discovered something important:

They had substantial equity.

And there were alternatives they hadn't been told about.

The situation was difficult.

But difficult and hopeless aren't the same thing.

That's why you should know your:

Timeline.

Property value.

Mortgage balance.

Equity.

Available options.

Before accepting anyone's declaration that your situation is hopeless.

Ask Arielle

Q: Someone says they can save my home. How do I know whether they're legitimate?

Don't start with their promise.

Start with verification.

Who are they?

What exactly are they proposing?

How are they compensated?

Are they appropriately licensed where required?

What are they asking you to sign?

What happens if their strategy doesn't work?

And what other options exist?

When the stakes include your home, a second qualified opinion isn't being difficult.

It's being responsible.

Arielle Dixon, REALTOR®
Christie's International Real Estate Sereno
CalDRE #02056018

This article provides general educational information and is not legal, tax, lending or financial advice. Homeowners facing foreclosure should consider contacting their mortgage servicer, a HUD-approved housing counselor and appropriate qualified professionals.