Desperate times call for desperate measures. The Better Business Bureau's Allison Southwick says the housing market's instability is a boon for scammers looking to take advantage of people frantic to save their homes. "The growing number of people facing foreclosure creates a big pond for scammers to fish in," she said.
Enter the foreclosure rescue scam: A "loan modification" company offers to act as middleman in renegotiating a homeowner's monthly loan payment with his or her bank. The company charges an upfront fee of up to $5,000. While some loan mod outfits are legitimate, many others take the advance money before even analyzing whether the new client is likely to be eligible for a change in his or her loan. "The usual outcome is that they take your money, provide little or no service, and then refuse to refund the fee," warns the Better Business Bureau [source: BBB].