The Better Business Bureau Has on Alert in the scam section that Foreclosure “Rescue Scams Are on the Rise”
It basically talks about helping people out of the pre-foreclosure stage.
How can I avoid falling into this category if I do pre-foreclosure?
any suggestions are welcomed.
Check with your state (here in Illinois the info is located on the Attorney General’s website, so maybe you should start with yours) to search for any active or proposed legislature. Then make sure that you don’t do anything it says you can’t do.
Personally, I think the better way is to reach out to people before they fall into pre-foreclosure. People are usually able to see that, 'wow, with this [INSERT FINANCIAL OBSTACLE HERE], soon I’m not going to be able to keep up with these mortgage payments I need some help" long before they officially default. If you are marketing to these folks you won’t have to worry about the pre-foreclosure laws.
The other thing you can do is just focus on short sales. You are basically accomplishing the same goal–buying the house at a discount–without dealing with the law. Sure, you are subject to rules outlined by the lender, but unlike most laws, rules can be flexible.
This is just my take on it. I’m still fairly new with this (still nestling under my mentor’s wings), so hopefully some vets will chime in.
HTH