When it comes to serious financial turmoil, California consumers often choose one of two approaches. Many let the situation overwhelm them, and are reactionary in their responses to financial trouble. Others decide to take a proactive approach, and tackle the problem head-on. In the realm of finances, burying one’s head in the sand is never the best path to take, especially for homeowners who wish to stop foreclosure.

When the bank or lender begins a foreclosure action, it is important to make contact and gain a full understanding of the timeline of that process. This is also the time to ask about options and programs that may be available. Once the foreclosure has proceeded past a certain point, lenders are less likely to work with a homeowner to get them back on track. 

Remaining in contact with the lender also helps avoid falling victim to a wide range of scams that pose as loan modification offers. Any time that a consumer is contacted by phone or mail, it is imperative to confirm the identity and affiliation of the person on the other end of that communication. Many scam artists will call borrowers and pose as bank or mortgage reps, while in fact they are calling to solicit for loan modification services.

The problem is prevalent enough to have prompted a recent warning from the Attorney General’s office concerning such scams. For homeowners who wish to stop foreclosure, the best method is often filing for Chapter 13 bankruptcy. Doing so not only puts an immediate stop to the foreclosure, but also affords California borrowers the chance to restructure their debt and stabilize their financial footing.

Source: Boston Herald, “AG: Watch out for foreclosure scams,” Ira Kantor, March 7, 2013