Foreclosure rescue scams ask for money upfront, pressure you to sign over your deed, or pretend to be a government agency. Connecticut law restricts who can charge for this kind of help and when. Free, legitimate help is always available through HUD-approved counselors and the courts.
If you're behind on your mortgage, you may have already gotten a call, letter, or knock on the door from someone offering to "save your home." Some of these offers are genuine. Many are not. This page walks through the common patterns so you can tell the difference, without any pressure to act today.
What is a foreclosure rescue scam?
A foreclosure rescue scam is any offer from someone who is not your lender or servicer that asks you to pay money, sign documents, or hand over your deed in exchange for a promise to stop or delay your foreclosure. The Connecticut Department of Banking warns homeowners to be careful of non-lawyers who ask for a fee for counseling, loan modification, foreclosure prevention, or a "forensic audit" of loan documents, regardless of their promises. The federal Consumer Financial Protection Bureau describes the same pattern nationally, noting that scammers often use mail or branding that looks official to gain trust.
What are the warning signs?
According to the CFPB, you may be looking at a scam if the offer does any of the following:
- Tells you to stop making mortgage payments or to stop talking to your servicer
- Charges a fee before any work is done
- Asks you to send payments to someone other than your lender or servicer
- Asks you to sign over the title or deed to your home, sometimes framed as a "rent to buy back" arrangement
- Pushes you to sign papers you don't fully understand
- Pressures you to decide right away
The Connecticut Department of Banking adds a specific caution: you should never pay attorneys you have not met in person, since out-of-state operators have posed as Connecticut law firms in the past.
A real example from Connecticut
In 2009, the Connecticut Attorney General warned residents about two companies operating as an unlicensed law office, charging homeowners for foreclosure mediation help that the courts already provide at no cost. The case is a reminder that scams can look polished and even claim to be law firms.
What does Connecticut law actually require?
Connecticut regulates this activity through its debt negotiation statutes. Under Connecticut General Statutes § 36a-671, "debt negotiation" includes negotiating loan terms on a homeowner's behalf and "foreclosure rescue services," and anyone performing these services for a fee generally must hold a license from the Connecticut Department of Banking. Under § 36a-671b, a compliant contract must give the homeowner a three-business-day right to cancel, and the law generally prohibits collecting a fee until the agreed service has been fully performed, though reasonable periodic payments tied to work actually completed may be allowed if spelled out in the contract. The Connecticut Attorney General's consumer page summarizes these same protections and reminds residents that the Department of Banking administers a toll-free Foreclosure Hotline for questions about a specific company or offer.
What should you do this week?
- Keep opening and responding to mail from your actual servicer. The first 90 days behind on your mortgage page covers what those notices mean and what to track.
- Before you pay anyone for foreclosure help, call the Connecticut Department of Banking's Foreclosure Hotline to ask whether the company is licensed and whether the offer is reasonable for your situation.
- If you're in an active court case, remember that Connecticut's foreclosure mediation program is run through the courts at no cost to you.
- If a HUD-approved counselor already offers something for free, be skeptical of anyone charging for the identical service.
- Don't sign anything you haven't read fully or that you don't understand. Take it to a Connecticut attorney first.
Common scam patterns to recognize
| What they say | What's usually really happening |
|---|
| "Pay us and we'll negotiate directly with your bank." | You may be paying for a phone call you could make yourself, or for nothing at all. |
| "Sign the deed to us now; you can rent and buy it back later." | This can strip your equity and end with you facing eviction when the new owner stops paying the mortgage. |
| "We're approved by the government mortgage relief program." | Real government agencies and HUD-approved counselors never ask for payment to help you. |
| "Sign today or you'll lose your house." | Legitimate help does not require an instant decision; take time to verify before signing anything. |
Where can you get free, trustworthy help in Connecticut?
Connecticut's state and federal help for struggling homeowners page lists CHFA's Emergency Mortgage Assistance Program and HUD-approved counseling agencies, all of which offer free guidance. You can also reach the Connecticut Department of Banking's Foreclosure Hotline at 1-877-472-8313, or HUD's housing counseling line at 1-800-569-4287. The CFPB also offers a free online counselor locator at consumerfinance.gov/find-a-housing-counselor. None of these resources will ever ask you to pay them first.
Where does selling the house fit in?
Selling is one option among several, alongside loan modification, repayment plans, mediation, or simply working with your servicer. It's not something to decide quickly or under pressure, and it isn't right for every situation. If you want to understand your equity and whether a sale makes sense for you, RYZE Realty Group offers a free "should you sell?" review that walks through a valuation and the equity math, with no pressure either way. If you'd rather explore other paths first, our overview of selling during foreclosure and our main foreclosure help hub are good starting points, and a Connecticut attorney or HUD-approved counselor can help you weigh the legal and financial details that are specific to your case.