Sad but true, we are in the midst of record foreclosure rates. And also sad but true, there are charlatans who would gladly take advantage of this family tragedy for personal gain. And that brings me to TheStreet.com’s warning about mortgage rescue scams:

Foreclosure-rescue scams usually revolve around heavily promoted deals supposedly designed to save the homes of people who have fallen behind on their mortgage payments and are facing foreclosure. The scam artists proclaim to “save your home” or “pay your mortgage,” but in reality they only generate a quick profit for themselves while possibly stripping away the value of the home with no benefit to the owner.

“Scam artists can evict a family from their own home and then sell it on the open market before the homeowner has any idea of what is going on,” says Gail Cunningham, spokesperson for the National Foundation for Credit Counseling.

Make no mistake, there are legitimate services that will help you as well, and they too are growing. The most helpful tip they have for selecting a service is that scammers often ask for money up front, while legit services usually do not. The National Foundation for Credit Counseling adds this list of red flags:

The NFCC advises homeowners fearing foreclosure to proceed with extreme caution if an individual or company:

• Calls itself a “mortgage consultant” or “foreclosure service.”
• Contacts people whose homes are listed for foreclosure, including anyone who uses flyers or solicits for business door-to-door, by phone or email.
• Encourages you to lease your home so you can buy it back over time.
• Collects a fee before providing any services to you.
• Instructs you to cease all contact with your lender, credit or housing counselors, lawyer or other legitimate experts.
• Tells you to make your mortgage payments directly to him or his company (not the lender).
• Requires that you transfer your property deed or title to him or his company.
• Makes a promise that seems too good to be true, for example, instant cash with “no strings attached.”
• Tells you that as part of the deal you will need to move out of your house for some period of time for remodeling or other reasons.
• Offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale.

You can also check out this clip by Freddie Mac. My advice? Have an observer come with you to meet with such companies: a lawyer; your adult child; a trusted friend. They are less apt to be swayed by emotion-manipulating pitches and listen to the unvarnished facts. If they say your observer can’t stay — they may falsely claim it’s for privacy reasons — consider that the biggest red flag of all.

Yikes!  Yesterday’s Case-Shiller index posted a record drop in house prices.  It was the 10th straight month of falling prices.  The experts do not expect improvement soon because “Prices will probably remain under pressure as the jump in foreclosures puts even more homes on the market just as stricter lending rules make it harder for buyers to find financing.”  Every metro area surveyed was down month-over-month, even if a few were still up year-over year.  Here’s the data in chart form.

As a little bonus, check out this two-part item on the current housing mess from EconoSpeak:  one;  two.

Despite this rather dismal news, I am optimistic that on a local basis we are closer to the end than the beginning.  We are starting to work through inventory.  There is evidence that listing prices are becoming more realistic (even when it means a short sale).  Builders only have so much inventory:  they are not breaking ground on anything not already sold;  and since the end of the year is next week, the incentive to get property off the books for tax purposes is going away.  And topping all this off is the news that Nevada is once more the fastest growing state, with 2.56 million residents and a growth rate of 2.9%.  Since “demographic experts think the county’s population surged past the 2 million mark sometime in the past few months,”  that means almost 80% of the state’s population lives here in the Las Vegas Valley.  Those 2 million people and all the newcomers need places to live.