How foreclosure rescue works
1. Foreclosure-rescue firms use public records and paid data services to gather information about homes at risk of foreclosure.
2. A company contacts homeowners and offers to help them avoid foreclosure, often with an offer like this: In exchange for ownership of the house, the foreclosure-rescue firm will make mortgage payments current, pay off the mortgage, pay $500 cash to the homeowner and allow the former owner to rent for 18 months with up to three months free.
4. The now-renter has the option of buying back the home at market value within 18 months. The renter must secure new financing.
5. If he is unable to secure financing within 18 months, the renter must move. The business is free to rent the house to someone else or sell the property and collect equity that has built over time.